Brent Morgan is a real estate agent for Coastal Estates, a residential real estate development. Because of

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Brent Morgan is a real estate agent for Coastal Estates, a residential real estate development. Because of his outstanding sales performance, Brent is permitted to buy a lot for $300,000 that normally would sell for $500,000. Brent is the only real estate agent for Coastal Estates who is permitted to do so.

a. Does Brent recognize gross income from the transaction? Explain.

b. What is Brent’s adjusted basis for the land?

c. Write a letter to Brent informing him of the income tax consequences of his acquisition of the lot. His address is 100 Tower Road, San Diego, CA 92182.

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a Brent recognizes gross income from the transaction He recognizes a settlement gain of 564000 the d...View the full answer

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