As a tax practitioner, you often get people asking questions concerning the tax effect of property transactions. This year is no exception. You've had individual clients ask you the following questions this year:
1. I inherited property from my grandfather, and I received a gift of property from another family member. How do I determine the basis in each piece of property?
2. I bought a piece of property that is used in a trade or business. Are there any tax deductions associated with this purchase of property? If so, how do I determine the amount of those deductions?
Answer each of these questions, explaining the applicable rules and possibilities of each.