Respond to both of the following scenarios regarding a fictional client, Hubert. Keep in mind that Hubert has two different types of capital transactions that will be accounted for on his tax return during this discussion.

Hubert purchases all of the rights in a patent from the inventor who developed the patented product. After holding the patent for two years, Hubert sells all of the rights in the patent for a substantial gain. What issues does Hubert face if he wants to treat the gain as a long-term capital gain?

Hubert also owns vacant land that he purchased many years ago as an investment. After getting approval to subdivide it into 35 lots, he made minimal improvements and then sold the entire property to a real estate developer. Huberts recognized gain on the sale was $1,200,000. Is this transaction eligible for the real property subdivided for sale rules? Why or why not?