Discuss the estate and income tax consequences

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Problem - On June 1, 2013, Mario entered into a contract to sell real estate for $1 million (adjusted basis $200,000). The sale was conditioned on a rezoning of the property for commercial use. A $50,000 deposit placed in escrow by the purchaser was refundable in the event the rezoning was not accomplished.    After considerable controversy, the application was approved on November 10, and two days later, the sum of $950,000 was paid to Mario's estate in full satisfaction of the purchase price. Mario had died unexpectedly on November 1. Discuss the estate and income tax consequences of this set of facts if it is assumed that the sale of the real estate occurred:

a. After Mario's death.

b. Before Mario's death.

When do you think the sale occurred? Why?

Reference no: EM131585171

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