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