Problem 15
Your clients Paul and Mary file their federal form 1040 using the married filing jointly filing
status. Based on a preliminary review of their 2024 tax information you tell Paul and Mary to
expect to pay AMT for 2024.
Required
Based on an inquiry from Mary, look up for Paul and Mary the AMT taxable income amount at
which the AMT rate will increase from 26% to 28%.
Problem 16
During 2024, your grandfather gifted you Vacant Lot A in Southern Shores, NC that had a cost
basis to him of $50,000 and a fair market value on the date of the gift (6.15.24) of $500,000.
After this transaction was completed, your grandfather instructed his attorney to prepare the
necessary legal documents, including the deed, to transfer Vacant Lot B in Southern Shores,
NC that had a cost basis to him of $75,000 and a fair value as of the date of the gift of
$500,000 to you as a gift.
Unfortunately, before the gift of Vacant Lot B could be completed your grandfather passed
away on August 14, 2024. Since you are his only surviving grandchild, you were not surprised
to learn that you were bequeathed Vacant Lot B in his will.
Required
Based solely on the preceding, complete the following with respect to YOUR basis in Vacant
Lots, A and B.
Basis Vacant Lot A
Basis Vacant Lot B
Problem 17
Based solely on the information presented in Problem 16 and that the fair market value of
Vacant Lot B as of the date of your grandfather's death is a supportable value that will not be
questioned by the IRS.
Required
If you sold Vacant Lot B on September 15, 2024, for a net cash price of $550,000, calculate
your gain or loss on the sale and determine if the gain or loss is long-term or short-term.
Gain or Loss
Long or Short Term
