Mrs. Wolter, an unmarried individual, owns investment land with a $138,000 basis and a $200,000 FMV. Compute the after-tax (income tax and Medicare contribution tax) sale proceeds in each of the following cases:
a. She sells the land herself. Her taxable income before considering the long-term gain on sale is $310,000.
b. She gives a 25 percent interest in the land to each of her four single adult grand-children (without incurring a gift tax) who immediately sell it. Each grandchild’s taxable income before considering the gain on sale is $8,000.
c. She dies while still owning the land. Her single daughter inherits the land and immediately sells it. The daughter’s taxable income before considering the gain on sale is $79,000.