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Against the advice of both his attorney and CPA, Nicholas Jones sold 2 8 6 acres of farmland to his favorite son, James Jones, on
Against the advice of both his attorney and CPA, Nicholas Jones sold acres of farmland to his favorite son, James Jones, on October for $ per acre. At the time of the sale, the land's fairmarket value was $ per acre with an adjusted cost basis of $ Nicholas and James executed a contractfordeed to encapsulate this ownership transfer, requiring a down payment. Nicholas Jones intends to apply the installment method to this transaction. Ongoing payments are due each October for years, with compounded interest at per year.
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What are the tax implications of this transaction on Nicholas Jones? This fact pattern may raise federal gift, federal income tax, and State of Minnesota income tax issues.
Prepare a tax research memo related to this set of facts for Nicholas Jones tax file.
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Nicholas Jones
Main Street
Montgomery, MN
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