Siri’s revocable trust held title to a plot of investment land that she had acquired in 2003. On October 20, 2011, the trust entered into a sales contract with Hilltop Developers. A closing date of March 20, 2012, was set by the terms of the contract.

On February 3, 2012, Siri’s engineers discovered a natural gas pipeline under the land, a fact that was not previously known by the parties. To allow for changes in the terms of the contract that were needed because of this discovery, the closing date for the sale was delayed until June 1, 2012.

The trust’s basis in the land is $1 million. The original sales price was set at $1.1 million, reflecting difficulties in finding a purchaser in a “down” real estate market. But after the terms of the sale were adjusted, on May 20, 2012, a new $1.5 million sales price was agreed to. The closing and title transfer occurred on June 1 of that year.

Siri died on May 3, 2012. Under § 2036, the land is included in Siri’s gross estate. Is the $500,000 capital gain on the sale treated as income in respect of a decedent (IRD) to her as well? Remember that, because neither party canceled the original deal, the sale was certain to occur under the contract. But Hilltop and the trust were renegotiating the terms of the contract when Siri died.

Identify the administrative and judicial precedents that are most pertinent for the parties.

Cite and summarize your findings in an outline for a talk that you will deliver next week to your school’s Accounting Club.