What advice would give to the client

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A prospective client has come to in need of tax planning advice. He has a rental property that he purchased two years ago for $150,000. He is thinking about selling it this year for $225,000. Upon reviewing his prior-year tax returns, you notice that he has never taken depreciation on the property and he wants to know if he needed to or not.

Problem 1: What recommendations would you make for this client regarding the previous omission of depreciation and what the tax consequences would be if the property is sold this year for $225,000?

Problem 2: The prospective client also has an elderly father who is contemplating making a gift of 500 shares of Google stock to him this year or not. His father originally bought the stock for $100 per share and it is currently valued at $850 per share. What advice would you give to the client and his father regarding gifting the stock vs. allowing the stock to pass to the client upon the father's death?

Reference no: EM132821577

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