1.Tom has $.52 million of property that he wants to leave to his four children. He is considering making a current gift of the property (rather than leaving the property to pass through his will). Tom has made many prior taxable gifts and additional taxable transfers will be subject to the highest transfer tax rate. Determine how much estate tax tom will save if he gifts the property now and survives at least three years, during which time the property appreciates to $5.84 million? Ignore the time value of money in your calculation.

2.On January 1, X9, Waldo received his 50% profits and capital interest in High Air, LLC in exchange for $2,030 in cash and real property with a $3,030 tax basis secured by a $2,030 nonrecourse mortgage. High Air reported a $15,030 loss for its X9 calendar year. How much loss can Waldo deduct, and how much loss must he suspend if he only applies the tax basis loss limitation?

3. Eve transferred $2.18 million of real estate into an irrevocable trust for her son, Garcia. The trustee was directed to retain income until Luis' 21st birthday and then pay him the corpus of the trust. Eve retained the power to require the trustee to pay income to Garcia at any time, and the right to the assets if Garcia predeceased her. What amount of the trust, if any, will be included in Eve's estate if she died shortly after making the transfer?

4. Jacob is a 40% owner of MB Partnership. Marty has decided to sell his interest in the business to Waldo for $110,000 cash plus the assumption of his share of MB's liabilities. Assume Jacob's inside and outside basis in MB are equal. MB shows the following balance sheet as of the sale date:

Assets:	Basis	FMV
Cash	$160,000	$160,000
Receivables	49,500	49,500
Inventory	86,000	164,000
Land held for investment	54,000	46,000
Totals	$349,500	$419,500

Liabilities and capital:
Liabilities	$126,000
Capital-Jacob	89,400
-Barry	134,100
Totals	$349,500

What is the amount and character of Jacob's recognized gain or loss?

5. Sweetwater Corporation declared a stock dividend to all common stock shareholders of record on December 31, 20X3. Shareholders will receive 1 share of Sweetwater common stock for each 5 shares of common stock they already own. Pierre Dorgan owns 500 shares of Sweetwater common stock with a tax basis of $150 per share. The fair market value of the Sweetwater common stock was $95 per share on December 31. What is Pierre's income tax basis per share in his new and existing common stock in Sweetwater, assuming the distribution is non-taxable?