Research Problem 1 On June 1, Mario entered into a contract to sell real estate for $1,000,000 (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. Mario died unexpectedly on November 1. After considerable controversy, the rezoning application was approved on November 10, and two days later, $950,000 was paid to Mario's estate in full satisfaction of the purchase price. Discuss the estate and income tax consequences of this scenario, assuming that the sale of the real estate occurred: a. After Mario's death. b. Before Mario's death. When do you think the sale occurred? Why? Partial list of research aids: 691 and 1014