liana purchased land three years ago for $90,100. She made a gift of the land to Tom, her brother, in the current year, when the fain arket value was $126,140. No Federal gift tax is paid on the transfer. Tom subsequently sells the property for $113,526. Tom's basis in the land is $ 90,100 V and he has a realized gain -v of $ 23,246 x on the sale. Assume, instead, that the land has a fair market value of $81,090 on the date of the gift, and that Tom sold the land for $77,036. m's basis in the land is $ 113,256 X and he has a realized Joss v of $ 12,614 x on the sale.
liana purchased land three years ago for $90,100. She made a gift of the land to Tom, her brother, in the current year, when the fain arket value was $126,140. No Federal gift tax is paid on the transfer. Tom subsequently sells the property for $113,526. Tom's basis in the land is $ 90,100 V and he has a realized gain -v of $ 23,246 x on the sale. Assume, instead, that the land has a fair market value of $81,090 on the date of the gift, and that Tom sold the land for $77,036. m's basis in the land is $ 113,256 X and he has a realized Joss v of $ 12,614 x on the sale.
Chapter14: Property Transact Ions: Capital Gains And Losses, § 1231, And Recapture Provisions
Section: Chapter Questions
Problem 56P
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Transcribed Image Text:Juliana purchased land three years ago for $90,100. She made a gift of the land to Tom, her brother, in the current year, when the fair
market value was $126,140. No Federal gift tax is paid on the transfer. Tom subsequently sells the property for $113,526.
a. Tom's basis in the land is $
90,100 V and he has a realized gain
-v of $
23,246 x on the sale.
b. Assume, instead, that the land has a fair market value of $81,090 on the date of the gift, and that Tom sold the land for $77,036.
Tom's basis in the land is $
113,256 x and he has a realized loss
V of
12,614 X on the sale.
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