Instead of gifting the stock to Child, Parent decides to kee…
Instead of gifting the stock to Child, Parent decides to keep the stock and instead transfer to Child income from rental property owned by Parent. The property is worth $400,000. The property generates $10,000 in profit every year. Parent gifts $10,000 to Child in YEAR 1. In YEAR 2, Parent again gifts $10,000 to Child. In YEAR 3, Parent decides to gift the entire rental property to Child instead, and the property generates $10,000 income when it is owned by Child. What are the tax consequences of these transactions to Child?
Read DetailsIn 2014, Ruth purchased an office building for $1,500,000, p…
In 2014, Ruth purchased an office building for $1,500,000, paying $100,000 cash and borrowing $1,400,000 recourse from a bank. According to the terms on the loan, Ruth paid interest only for the first 10 years whereupon the principal would come due. When 10 years finally came, Ruth could not make the principal payment of $1,400,000. Ruth had properly depreciated the building by $300,000 over the last 10 years. Ruth had assets of $600,000 (when that was gone, she was insolvent) at the time the payment was due, and Ruth could not to make the $1,400,000 payment. The bank took back the property in full satisfaction of Ruth’s obligations when the property had a FMV of $800,000. Which one of the following is correct?
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