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1.
a. No tax. There is a 500k allowance
b. Same as a
c. No exclusion. Needs to live there for 2 years
d. Basis is 200. Exclusion is 500. Sale is 1mm. thus tax bill is 300k
e. No exclusion. Must be principal residence
f. Basis is 190. Exclusion is 250. Sale is 400. Thus no tax liability

2. exception for health, employment, or unforeseen circumstances

a. exclusion is 125k because he lived in the house for 1 year. 12months/24=.50%*250=125k. Doesn’t
need to include 100k gain on sale in gross income
b. must include 75k in gross income

3. single buys house for 200k. moves in on1/1/16

a. sale is 350. Exclusion is 250. Thus no gain on sale
b. sale is 900. Excl is 250. Basis is 200. Thus 900-200-250=350 gain
c. ?
d. The two-year period for purposes of IRC Section 121(a) is measured from the date of the sale in
question

4. owned and lived in house for 10 years. Marries in last year. Basis is 100. Sale is 500
a. i. a husband and wife file a joint return;
ii.either spouse meets the ownership requirements during the applicable two-year period;
iii.both spouses meet the use requirements with respect to the property during the applicable two-year
period;
iv.and neither spouse is ineligible for the exclusion by virtue of a sale or exchange of a principal
residence within the preceding two years.
Once both spouses satisfy the eligibility rules and two years have passed since the last exclusion
was allowed to either spouse, the taxpayers may exclude $500,000 on their joint return. Here, they get
250 exclusion
b. They can use 500k exclusion
c.
d.

p270
1. Father owns land he bought for 80k. fmv is 90. Land is leased for 6k with 3k payments on april 1
and oct 1
a. Income is still to the father because he has dominion over daughter
b. Daughter is taxed because she owns the land. Takes fathers basis of 80k
c. Daughter has partial ownership over land so the rental payments can be attributed to her
d. If father has completely abdicated the trust interest then it belongs to daughter
e. S
f. S
g. S
h. S
2. 2
3. 3
P284
1.
a. The ps interest is considered a gift to the son. Ask prof if 704 requires dist share to be
included in sons GI. Also ask about fmv step up—wasn’t a purchase
b. Valid transfer bc daughter is also a doctor.
c. If parties are in bonafide transaction then its ok
2. Mom ownd apartments in p. Transfers apts to ps with 3 kids @25% each. Ps income is 100k
a.