Assume the same facts as in Problem C:12-21 and that Marcy has decided to give Phil property valued at $5.42 million. Phil probably will leave the gifted property to their children under his will.
a. What are the gift tax consequences to Marcy and the estate tax consequences to Phil of the transfer (assuming the property does not appreciate before his death)?
b. Assume Marcy is trying to decide whether to give Phil stock with an adjusted basis of $1,285,000 or land with an adjusted basis of $2.8 million. Each asset is valued at $5.42 million. Which asset would you recommend she give and why?