28.A particular parcel of real estate (land) is sold for $20,000,000 and was originally purchased for $10,000,000. On a taxable sale, explain a circumstance (type of investor, intent, entity, etc) that would pay the following U.S. federal income tax results on the $10,000,000 gain (exclude the 3.8% net investment income tax and any state taxes in the calculation):

a. No tax liability on the sale

b. $2,000,000 of tax

c. $2,960,000 of tax

d. $2,100,000 of tax

29. Which of the following entities are never subject to federal tax on its income:

A. A tax exempt investor.

B. A state government sponsored pension plan that is an integral part of the state.

C. An individual who is a real estate professional.

D. Only A & B. E. All of the above are subject to some level of federal taxes.

30. The fractions rule is relevant to what type of taxpayer:

A. US individual who is a real estate professional.

B. US individual who is not a real estate professional

C. Tax exempt organizations

D. Non-U.S. investors in real estate.

31. Assume the following facts about a Nevada property and calculate the total taxable income (after computing depreciation) and tax in each of the following circumstances, including, as applicable, federal entity level and dividend tax, net investment income and passthrough deduction: (use separate excel or worksheets if necessary) Industrial building which has the following attributes: Rental income $ 35,000 Property expenses $ 10,000 Interest expense $ 9,000 Land Basis $ 30,000 Building Basis $ 170,000 Debt $ 120,000 Equity $ 80,000

31a) Determine the taxable income and tax expense for an individual investor assuming that a real estate election is made (40 year depreciable life of the building and fully deductible interest). ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

31b) Determine the taxable income and tax expense for a corporate investor assuming that a real estate election is made (40 year depreciable life of the building and fully deductible interest). ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

31c) What is the taxable income and tax expense for a private pension plan (e.g. GE Pension) that is considered a qualified nonprofit organization who receives 50% of the taxable income from an LLC which is taxed as a partnership (provide the answer assuming the LLC is fractions rule compliant and if it violates the fractions rule)? ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________