Alan grandmother, Mary, owns the home in which she lives, a personal-use residence. Mary purchased the home years ago for $100,000. The fair market value of the home is currently $1,000,000. From a tax perspective, which of the following options is most beneficial for Alan? Assume the value of the home will continue to increase over the years.

Multiple Choice

• Mary sells the home to Alan under an installment agreement so that Alan can use the installment method to defer some of his gain

• Alan inherits the home from Mary.

• Alan exchanges his home, which he currently uses exclusively as his personal residence, for Mary's home in a like-kind exchange. Alan purchased his home 2 years ago for $1,100,000, but it is now worth $1,000,000.

• Mary gifts the home to Alan during Mary's lifetime.