Question

On April 5, 2020, Ryan received land and a building from Thom as a gift. Thom's adjusted basis and the fair market value at the date of the gift are as follows:

Asset	Adjusted Basis			FMV
Land	$40,000			$35,000
Building	110,000			90,000

Thom paid gift tax of $8,000 on the transfer.

When required, round any division to four decimal places. Round final answers to the nearest dollar.

a. Determine Ryan's adjusted basis for the land and building.

Ryan's basis for gain:

Ryan's adjusted basis for the land is $.

Ryan's adjusted basis for the building is $.

Ryan's basis for loss:

Ryan's adjusted basis for the land is $.

Ryan's adjusted basis for the building is $.

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b. Assume instead that the fair market value of the land was $53,000 and that of the building was $120,000. Determine Ryan's adjusted basis for the land and building.

Ryan's total basis for the assets received from Thom is $.

Ryan's adjusted basis for the land is $.

Ryan's adjusted basis for the building is $

Answer 1

a. Determine Ryan's adjusted basis for the land and building.

Ryan's basis for gain:   

Ryan's adjusted basis for the land is    $ 40,000

Ryan's adjusted basis for the building is $ 110,000

Ryan's basis for loss:

Ryan's adjusted basis for the land is $ 35,000

Ryan's adjusted basis for the building is $ 90,000

b. Assume instead that the fair market value of the land was $53,000 and that of the building was $120,000. Determine Ryan's adjusted basis for the land and building.

Ryan's total basis for the assets received from Thom is $ 173,000 ($ 53,000 + $ 120,000)

Ryan's adjusted basis for the land is $ 53,000

Ryan's adjusted basis for the building is $ 120,000

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