Walter sells land with an adjusted basis of $175,000 and a fair market value of $160,000 to his mother, Shirley, for
$160,000. Walter reinvests the proceeds in the stock market. Shirley holds the land for one year and a day and sells it in the marketplace for $169,000.
a. Determine the tax consequences to Walter.
b. Determine the tax consequences to Shirley.

Question

Quizplus · Accepted Answer

The Answer of Walter sells land with an adjusted basis of $175,000 and a fair market value of $160,000 to his mother, Shirley, for
$160,000. Walter reinvests the proceeds in the stock market. Shirley holds the land for one year and a day and sells it in the marketplace for $169,000.
a. Determine the tax consequences to Walter.
b. Determine the tax consequences to Shirley.

Walter Sells Land with an Adjusted Basis of $175,000 and a Fair