Problem:
One of your clients, David, has been trying to convince his mother, Lorinda, to give him a tract of undeveloped land. Lorinda is willing to make the gift, but she is uncertain about the tax consequences involved. In any event, she wants David to pay any gift tax that would result.
The land was purchased by Lorinda 30 years ago for $30,000 and currently has a value of $200,000. Lorinda's only prior taxable gift occurred in 2004 and involved an apartment building worth $1 million. No gift tax resulted, due to the unified credit.
What are the tax consequences of a "net gift" of the land by his mother?