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During the current$$ year,

DonDon

sells a tract of land for

$ $550$ comma $000$$$550,000.$

The property was received as a gift from

MarvaMarva

on March$10,1995,$ when the property had a

$ $300$ comma $000$$$300,000$

fair market value$($FMV$).$ The taxable gift was

$ $290$ comma $000$$$290,000$

because the annual exclusion was

$ $10$ comma $000$$$10,000$

in $1995.$

MarvaMarva

purchased the property on April$12,1980,$ for

$ $184$ comma $000$$$184,000.$

At the time of the$$ gift,

MarvaMarva

paid a gift tax of

$ $17$ comma $000$$$17,000.$

In order to sell the$$ property,

DonDon

paid a sales commission of

$ $12$ comma $000$$$12,000.$

Read the requirements.

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Part $1$

Requirement a$.$ What is

DonDon$\text{'}$s

realized gain on the$$ sale?

Select the$$ formula, then calculate

DonDon$\text{'}$s

realized gain on the sale. $($Do not round intermediary calculations. Only round the amounts you input in the cells to the nearest$$ dollar.$)$

Amount realized

$$538,000$

Minus:

Basis

$(190,800)$

Realized gain

$$347,200$

Part $2$

Requirement b$.$ How would your answer to Part a$$ change, if at$$ all, if the FMV of the gift property was

$ $65$ comma $000$$$65,000$

as of the date of the$$ gift?

The realized gain in this scenario is

$$

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