Accounting Question

BELOW ARE THE PROFESSORS DIRECTIONS, I WENT AHEAD AND POSTED THEM FOR YOU TO UNDERSTAND EVERYTHING CLEARLY AND HOPEFULLY EVERYTHING IS EASILY READABLE AND UNDERSTANDABLE. THE DIRECTIONS ARE PRETTY STRAIGHT FORWARD. THANKS Background: Sergio entered into a contract on March 25 to sell real estate for $1 million. The sale was subject to the condition that the property was rezoned from R-7 to CN-2. The adjusted basis of the property was $200,000. The purchaser placed $50,000 in escrow, which was refundable if the zoning was not accomplished by September 30. Sergio continued working on the rezoning up until the day he died. He died on September 6. The rezoning was approved on September 17 and on September 19 the remainder of the purchase price, $950,000 was paid to his estate. The fiduciary of Sergio’s estate is trying to work out whether the sale goes on the final return for Sergioor is included in the return for the estate and is seeking your advice as to when the sale occurred, why and the income tax and estate tax consequences. Did the sale occur before or after the death of Sergio? A partial list of aids to help you with your research §§691 and 1014 George W. Keck, 49 T.C. 313 (1968), rev’d 69-2 USTC ¶9626, 24 AFTR 2d 69-5554, 415 F.2d 531 (CA-6, 1969) Trust Company of Georgia v. Ross, 68-1 USTC ¶9133, 21 AFTR 2d 311, 392 F.2d 694 (CA-5. 1967) Your responsibility: Prepare a tax research memo addressing the question that has been raised. You will need to support your conclusion using primary sources of tax law. Your textbook is NOT primary authority Nor are IRS Publications. You must use proper citation form in your memo (see Chapter 2 for help with citation form). The form for this communication should be professional and in the form of a tax research memo (examples posted on Canvas and a similar example in your textbook). Do yourself a favor and look at the grading rubric before you submit. This memo should be at whatever length you feel is appropriate to resolve the issues. We do NOT use a bibliography or list of references in a tax research memo. We do not include a Background in a tax memo. You will see that citations are within the text of the document in the example. Once a court case has been cited in full, it can be referred to using simply the name in italics. For this assignment, points are distributed as follows: Aspects of the memo Points Content – facts and issue(s) 16 Content – analysis 30 Content – conclusion 14 Organization 8 Audience 8 Style 8 Mechanics 8 Referencing 8 Total 100 Requirements: N/A