Question - Using the following independent situations, answer the following questions:
Situation 1 - Clara received from her Aunt Sona, property with a FMV at the date of the gift of $51,400. Aunt Sona purchased the property five years ago for $44,300. Clara sold the property for $53,500. Assume Aunt Sona does not have MAGI of over $200,000.
1. What is the basis to Clara?
2. What is Clara's gain on the sale?
3. If Clara is in the 33% tax bracket, what is the tax on the gain (assuming she has no other gains/losses to be netted)?