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Billy Bob and Angelina finalized their divorce on January 1, Year One. During their marriage, Billy Bob and Angelina owned Blackacre, a parcel of real property that they used as their personal residence. Billy Bob and Angelina each paid $40,000 of their personal funds to buy Blackacre. In addition to this property, Billy Bob also owned Whiteacre, a parcel of unimproved real property, as an investment. Angelina owned shares of stock in Croft Corporation, a publicly traded entity.

(a) The final divorce decree awarded title to Blackacre to Angelina. In February of Year One, Billy Bob conveyed his one-half interest in Blackacre to Angelina. The fair market value of Billy Bobs interest was $100,000, and his basis in that interest was $40,000. What are the federal income tax consequences of this transaction to Billy Bob and Angelina?

(b) Assume instead that the divorce decree did not affect ownership of the Blackacre residence, but it allowed Angelina the right to occupy the residence and required Billy Bob to pay the entire monthly mortgage payments with respect to the property until Angelina dies or remarries, whichever occurs first. Also assume that each monthly mortgage payment consisted of $500 in principal and $400 in interest. What are the federal income tax consequences of this arrangement?

(c) The divorce decree required Billy Bob to transfer Whiteacre to Angelina. Billy Bob effected the conveyance in Year Three, at which time his basis in the property was $50,000 and its fair market value was $130,000. What are the federal income tax consequences of this transfer?

(d) The divorce decree required Angelina to transfer all of her shares in Croft Corporation to Billy Bob. Angelina conveyed title to Billy Bob late in Year One. At the time of the transfer, Angelinas basis in the stock was $100,000, but the shares were only worth $80,000. What are the federal income tax consequences of this transaction?

(e) Suppose you represented Angelina in the divorce proceedings. Would you have made any recommendations to Angelina with respect to the Croft Corporation shares?

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