Bala and Ann purchased as investments three identica l
parcels of land over a several – year period. Two years ago they gave one
parcel to their daughter, Kim, who is now age 16. 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 parce l
tvo or three 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 Bala and Ann will result in a $20,000 gain and the sale of the
ocher parcel will result in a $28,000 loss. The sale of the parcel owned by Kim
will result in a $19,000 gain. Kim has no other income and does not expect any
significant income for several years. Bala and Ann, however, are in the 37% tax
bracket. They do nor have any other capital gains chis year. Which two
properties would you recommend that they sell this year? Why?
Leave a Reply