On June 1, 2017 Mario entered into a contract to sell real estate for $1 million (adjusted basis $200,000). The sale was conditioned on a rezoning of the property for commercial use. A $50,000 deposit placed in escrow by the purchaser was refundable in the event the rezoning was not accomplished.

After considerable controversy, the rezoning application was approved on November 10, and two days later, $950,000 was paid to Marios estate in full satisfaction of the purchase price. Mario had died unexpectedly on November 1. Discuss the estate and income tax consequences of this set of facts if it is assumed that the sale of the real estate occurred:

a. After Marios death.

b. Before Marios death.

When do you think the sale occurred? Why?