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Jessica owns 250 acres of rental property. Jessica gives Melissa the right to any rental income that the property earns in the next eight years.

Jessica owns 250 acres of rental property. Jessica gives Melissa the right to any rental income that the property earns in the next eight years. What if Jessica tells Melissa that she can keep 50 percent of any rental income that she generates on the 250 acres, on what amounts will Jessica pay tax? On what amounts will Melissa pay tax? Explain your answers.

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