George Jones lives in Alaska. He grew up in eastern Washington, and his elderly father, Richard lived on the 80-acre family farm. In 2019, Richard’s attorney told Richard to transfer the farm to George, Richard’s only child, to protect it in case Richard needed to go to an assisted living facility. Richard died in 2021. This will devised all of his assets to George.
George wants to sell the farm. However, Richard purchased the farm in 1961 for $30,000. A developer is interested in buying the farm to build a new subdivision and has offered George $1,175,000. George consulted with his accountant in Alaska, Tiffany Black. Tiffany advised George that there was no step-up in basis, and he would pay approximately $230,000 in federal income tax on the sale.
George contacted his father’s estate attorney to find out if he could “undo” the 2019 transfer. The attorney told George that he could file a judicial action to set aside the transfer. Then George would inherit the farm. George asks Tiffany is the attorney’s proposed action would reduce his tax liability.
Write a paper answering the following questions. There is no page limit nor requirement though a thorough answer will likely be at least 3 pages long
How should Tiffany respond? Explain and give valid reasoning for your answer.
Does Tiffany have an ethical duty to consider any judicial doctrines? That is, do any rules created through case law apply to the situation at hand?
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