Using the following independent situations, answer the following questions:
Situation # 1
Clara received from her Aunt Sona property with a FMV at the date of the gift of $40,000. Aunt Sona purchased the property five years ago for $35,000. Clara sold the property for $43,000. Assume Sona does not have MAGI over $200,000.
a. What is the basis to Clara?
b. What is Clara’s gain on the sale?
c. If Clara is in the 33% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)?
d. If Clara is in the 15% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)?
Situation #2
Clara received from her Aunt Sona property with a FMV at the date of the gift of $30,000. Aunt Sona purchased the property five years ago for $35,000.
a. If Clara sold the property for $43,000, what is her gain or loss on the sale?
b. If Clara sold the property for $33,000, what is her gain or loss on the sale?
c. If Clara sold the property for $28,000, what is her gain or loss on the sale?