Explore BrainMass

Explore BrainMass

    Donee's Basis in Gifted Property

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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 2004, John gifts the property to Jane when its FMV is $400,000. Jane's basis in the property is $500,000.

    © BrainMass Inc. brainmass.com June 4, 2020, 1:19 am ad1c9bdddf

    Solution Preview

    Assuming that John's basis in the property is greater than $400,000, this is false. IRC 1015(a) states that "If the property was acquired by gift after December 31, 1920, the basis ...

    Solution Summary

    This solution cites authorities and discusses how the donee determines his or her basis in gifted property.