1) Sybil gave her son Todd 1,000 shares of XYZ stock on January 16, 2007. The
stock's high and low selling prices that day were $55 and $53. Sybil had purchased the
stock in 2006 for $70 per share. At the beginning of 2008, Todd sold the shares for
$62,000. Provide the details of both income and gift tax effects for these events.
2) William has decided to purchase a large apartment complex. He pays $100,000
cash, obtains a loan on the property for $500,000, and assumes the first mortgage
balance of $250,000. He also gives the sellers $100,000 of marketable securities that he
purchased three years ago for $125,000 and paid a finder's fee of $5,000, legal fees of
$6,000, and transfer taxes of $12,000. What is William's acquisition basis for the
building? Does he have any other tax consequences as a result of this purchase?
The expert examines the tax for a large apartment complex.