Robert Diaz owns investment land that has a basis of $100,000 and a fair market value of $280,000. He expects that it will continue to appreciate in value. Roberts uncle, Geoffrey, has a terminal illness and is expected to survive no more than six months. Robert will like to increase the basis of the land and has devised a plan in which he gifts the land to Geoffrey. When Geoffrey dies, Robert will inherit the land.Geoffrey has agreed to participate in the plan; however, Robert wants you to confirm what his basis will be when he inherits the land from Geoffrey. Prepare a letter to Robert and MEMO for the tax file documenting you conclusions. Roberts address is 1405 8^th street West, Britton, SD 57430.

Research aids:

IRC section 1041

Revenue ruling?