Amy makes a transfer of a painting worth $100,000 to her favorite charity. She paid $40,000 for
Question:
Amy makes a transfer of a painting worth $100,000 to her favorite charity. She paid $40,000 for the painting 10 years ago. Which of the following statements is most correct about that transfer?
The first $15,000 of that gift is not taxed because it qualifies for the annual exclusion and the remaining $85,000 is not taxed because it is less than the equivalent exemption.
The first $15,000 of that gift is not taxed because it qualifies for the annual exclusion and the remaining $85,000 is not taxed because it is less than the unified credit.
The first $15,000 of that gift is not taxed because it qualifies for the annual exclusion and the remaining $85,000 is not taxed because it qualifies for a deduction as a charitable contribution.
The full amount of the gift is not taxed because it is a charitable contribution.
Amy gets to take a charitable contribution deduction only for the portion of the painting's value which exceeds her $40,000 basis in the property.
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston