Nick and Loretta have a rental property (a condo) in Florida. The rental property was

purchased for $300,000 in 2015. On January 1st, when the condo had a value of

$550,000, Nick gifted the property to Loretta and will not elect out of the spousal rollover.

Net rental income amounts to approximately $4,500 a month.

Analyze the current and future income tax implications

and reporting obligations with respect to the Florida property.