Jimmy buys 7,000 acres of vacant land in middle Georgia. He then purchases several hundred Ostriches to raise them. After he raises the Ostriches, he either sells the Ostrich or sells the Ostrich meat to restaurants and wholesale companies. After 7 years, Jimmy is unsuccessful in his venture, having lost money consistently in selling the Ostriches or the meat. He abandons his Ostrich efforts. He tries to sell the 7,000 acres of land in bulk, but is unable to find a buyer who is willing to buy the entire property. He breaks the acreage into 700-acre parcels, and tries to sell the 10 parcels to hunting clubs. He advertises on billboards throughout Georgia, and through various hunting magazines nationally. For 2021, Jimmy sells five lots at a net $300,000 gain.

Prepare a tax memorandum that discusses how the gain will be treated for tax purposes, how it will be reported on Jimmys tax return, and any tax planning suggestions that you encounter in your research.

Follow the format for the tax research memo as shown in Exhibit 10-2, Pages 352-353 of your textbook with the following modifications:

• In place of the CPA firm info before the Facts section, put your group number and member names.

• You can ignore the Actions to be Taken section at the bottom of the memo. Your solution should be typed on no more than three (3) standard letter-sized pages, with one-

  half (1/2) inch margins. Make sure to citate your authorities properly.