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Donee's Basis in Gifted Property

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Is this true or false with respect to the basis of property? Why or why not?

In 2002, John acquires property with a FMV of $500,000. In 2003, John gifts the property to Jane when its FMV is $600,000. Jane's basis in the property is $600,000.

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Solution Summary

This solution cites authorities and discusses the determination of the donee's basis in property gifted to him or her.

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Assuming that John's basis in the property is less than $600,000, this is false. IRC section 1015(a) states that "If the property was acquired by gift after December 31, ...

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