In 2003, Frank made an installment sale of real property to Stu, his son, for $1

Question

In 2003, Frank made an installment sale of real property to Stu, his son, for $1 million. Frank did not file a gift tax return. In 2012, the IRA audits Frank's 2010 income tax return and discovers the sale. The IRS then contends that the property Frank sold was worth $2.5 million in 2003 and that Frank made a $1.5 million gift to Stu in 2003. a. Can the IRS collect the gift tax on the 2003 gift? If not, will the 2003 gift affect the tax due on later gifts that Frank makes? b. Will Frank potentially incur any penalty? Explain.

Explanation / Answer

no yes yes please rate the answer as lifesaver. Thank u in advance. god bless u..

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