Kim, a single woman, owned a building with a fair market value of $2,000,000. Kim's adjusted basis in the building was $1,000,000. This year, Kim agreed to sell the building to her adult son, Robby for $1,300,000. She made no other gifts to Robby this year. What is the amount of Kim’s taxable gift?
Group of answer choices $285,000 $685,000 $985,000 $2,000,000
fair market value of building $2,000,000
Selling price $1,300,000
adjusted basis in the building was $1,000,000
Amount Deductable for tax calculation is $15000
The seller might have to file a gift return. They're allowed to give $15,000 per person each year without having to file a gift return
you can sell your property at a loss to a family member, but you can't take a deduction on the loss
so Kim’s taxable gift = fair market value of building or Selling price (Take highest amount)- Cost Price
The amount of Kim’s taxable gift =$985,000
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