Analyze the tax implications

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Analyze the tax implications of capital gains and/or losses based on the following case study. Apply the IRS codes to calculate adjusted gross income for individuals. Support your conclusions with reference to specific IRS codes and regulations.

Rob and Mary purchased as investments three identical parcels of land over a several-year period. Two years ago, they gave one parcel to their daughter, Deanna, who is now age 16. Deanna took the parcel as a gift and received the title. They have an offer from an investor who is interested in acquiring all three parcels. The buyer is able to purchase only two of the parcels now but wants to purchase the third parcel 2 or 3 years from now, when he expects to have available funds to acquire the property. Because they paid different prices for the parcels, the sales will result in different amounts of gains and losses. The sale of one parcel owned by Rob and Mary will result in a $20,000 gain, and the sale of the other parcel will result in a $28,000 loss. The sale of the parcel owned by Deanna will result in a $19,000 gain. Deanna has no other income and does not expect any significant income for several years. Rob and Mary, however, are in the 35% tax bracket. They do not have any other capital gains this year. Which property sales will result in the best tax implications for Rob, Mary, and Deanna? Why? Which two properties would you recommend that they sell this year? Based on your recommendation, if Rob and Mary's gross joint income was $373,000, calculate their AGI.

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Reference no: EM1362676

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