Writing Assignment –
Our
client, Happy T Behere, inherited a Peanuts cartoon from her mother more than a
year ago. At the time of her death, the cartoon was valued at $3,000. Originally,
her mother had purchased it at a charity auction for $1,000. At the alternative
valuation date the cartoon was valued at $2,500. It is a valuable cartoon as it
featured a character, Charlotte Braun, included in only 10 comic strips. It is
currently listed and is expected to sell at an auction house for $10,000
tomorrow. She will have to pay a commission of 3% to sell it. She intends to
split the proceeds with her brother. What is the tax impact of her selling the
Peanuts cartoon? She doesn’t want to accept the final auction amount before
hearing from you. Both Happy and her brother are at 22% marginal tax bracket.
Your memo should include the four sections of a research
memo discussed in class. These would be:
1.
Facts
2.
Question or Query
3.
Discussion
4.
Conclusion
Please make sure to reference sources that can be relied
upon in your discussion section. Also, address the gift to her brother.