Assume the same facts as in Problem C:12-21 and that Marcy has decided to give Phil property valued at $5.48 million. Phil probably will leave the gifted property to their children under his will.

In problem C: 12-21

Phil and Marcy have been married for a number of years. Marcy is very wealthy, but Phil is not. In fact, Phil, who has only $10,000 of property, is very ill, and his doctor believes that he probably will die within the next few months.

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 $5.48 million. Which asset would you recommend she give and why?