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A owns property worth $100. In exchange for $10, on January 1, 2017, A grants B an option to buy the property for $100 at

A owns property worth $100. In exchange for $10, on January 1, 2017, A grants B an option to buy the property for $100 at any time before midnight, December 31, 2018. a. What are the federal income tax consequences associated with this transaction assuming in the alternative that

(i) the option is exercised in 2018, or (ii) the option is allowed to lapse?

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