Question

5. Holly has received various gifts over the years. She has decided to dispose of the following assets she received as gifts (assume for each of the gift transactions that no gift tax paid). Please answer the questions for each alternative scenario.

a. In 1997, she received a land worth $98,000. The donor's adjusted basis was $ 110,000. Holly sells the land for $102,000 in 2017.

Gift property basis:

Holly’s gain/loss on the sale:

b. In 2001, she received stock in Gold company worth $28,000. The donor's adjusted basis was $25,000. Holly sells the stock for $35,000 in 2017.

Gift property basis:

Holly’s gain/loss on the sale:

c. In 2008, she received stock in Silver Company worth $35,000. The donor's adjusted basis was $38,000. Holly sells the stock for $ 20,000 in 2017.

Gift property basis:

Holly’s gain/loss on the sale:

Answer 1

a. In 1997, she received a land worth $98,000. The donor's adjusted basis was $ 110,000. Holly sells the land for $102,000 in 2017.

Loss = $ 102,000 - $ 110,000 = - 8000

b. In 2001, she received stock in Gold company worth $28,000. The donor's adjusted basis was $25,000. Holly sells the stock for $35,000 in 2017.

$ 35000 (amount realized) - $ 28000 (adjusted basis) = $ 7000 (recognized gain)

c. In 2008, she received stock in Silver Company worth $35,000. The donor's adjusted basis was $38,000. Holly sells the stock for $ 20,000 in 2017.

c. $ 20000 (amount realized) - $ 35000 (adjusted basis) = $ 15000(recognized loss)