In gift taxes, why is the entire FMV of a gift possibly taxed instead of just the basis or adjusted basis? If the donee basis in the gift is the original basis plus taxes and not a stepped up basis to the current FMV, why would the donor have to pay unrealized gains taxes on it up to the FMV?

Answer rating: 100% (QA)

The entire fair market value FMV of a gift can be subject to ... View the full answer