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Nancy gives her grandson, Sean, 20 acres of land - Academic Heroes

Nancy gives her grandson, Sean, 20 acres of land

Ms. Imo, who is single, purchased her first home in 1991 for $85,000, and sold it in May 2000 for $178,500
February 12, 2020
During 2015, Dave, a single taxpayer, 39 years old
February 12, 2020

Nancy gives her grandson, Sean, 20 acres of land. Her tax basis in the land is $25,000. Nancy’s marginal tax

rate for the current year is 45%; her grandson’s is 25%. Its fair market value was $575,000 at the date of the transfer. If the gift tax rate is 40% and she has never made a gift in excess of $10,000 before this, what amount of gift tax will she pay? What is their net tax savings percentage as a family unit if Sean sells the land?   Would she be better off selling and leaving him the money or not selling?

 
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