Shontelle received a gift of income-producing property with an adjusted basis of $49,000 to the donor and
Question:
Shontelle received a gift of income-producing property with an adjusted basis of $49,000 to the donor and fair market value of $35,000 on the date of gift. No gift tax was paid by the donor. Shontelle subsequently sold the property for $41,000.
What is the recognized gain or loss? What is the recognized gain or loss if the taxpayer later sells the property for $30,000 or $55,000?
What is Shontelle’s holding period in the asset under each of these scenarios? Under which of these scenarios would you suggest (or not suggest) that Shontelle make a gift of the property? What if Shontelle passed away when the asset had an adjusted basis of $49,000 and a FMV of $55,000.
What would the basis of the property be to Shontelle’s heir? If Shontelle’s heir sold the property six months after she died for $57,000, what would be the heir’s holding period and recognized gain (or loss)? Is it generally better to leave appreciated or depreciated property to your heirs? Why?
Essentials of Accounting for Governmental and Not-for-Profit Organizations
ISBN: 978-0073527055
10th Edition
Authors: Paul A. Copley