Donald Sutton owns a commercial property that he acquired 10 years ago for $550,000 (the current UCC of the property is $300,000).The property was recently appraised and it was found that it has a fair market value of $1,100,000. Don would like to retire and as such is planning on selling the property and using the proceeds to purchase a house in Boca Raton.Don would prefer to transfer the property to a family member but would also like to consider an arms length sale.Here are Don's three options:

1. Sell the property to his brother Mark for $1,000,000.

1. Sell the property to his sister Karen for fair market value.

1. Sell the property to his neighbor Steve for fair market value.

For each of the alternatives, advise Donald of the tax consequences that will result from the disposition. In addition indicate the tax consequences for the individual who purchased the property.