On October 15, 1986, Patricia purchased a home in Scarsdale, New York, for $172,000. Later, she got married to Sam on April 1, 1989. On January 4, 1991, she transferred the house to Patricia and Sam, husband and wife. At that time, the house had a fair market value of $254,00. Between 1991 and 1998, Sam and Patricia had three children: Arlene, Beth and Cedric. On September 2, 2003, pursuant to advice from her estate planning lawyer, Patricia and Sam established an irrevocable trust that named Patricias brother, Tony, as trustee. The beneficiaries of the trust were to be the children of Sam and Patricia. The trust contains the following provision: During the lifetime of the grantor, Patricia, she may direct the trustee to distribute trust assets to or among the class of people that shall consist of her lineal issue. Upon the second death of Patricia and Sam, the assets not distributed in this manner shall be distributed to the children of Patricia and Sam, in equal shares; provided, that if any child of Patricia and Sam is under the age of 21, his or her share will be held in trust until such child reaches the age of 21. On July 14, 2013, Sam died. Patricia died less than one year later, on March 20, 2014. On June 16, 2014, Tony (on behalf of the trust) sold the house on the open market for $545,000. Please write a legal memorandum discussing the extent to which this sale will result in the recognition of a capital gain. Please make sure to cite appropriate legal authority for all assertions of law.