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2.        Stuart owns land with an adjusted basis of $190,000 and a fair market value of $500,000.  It...

2.        Stuart owns land with an adjusted basis of $190,000 and a fair market value of $500,000.  It is anticipated the value of the land will increase in the future.  Stuart wants the property to go to his nephew, Alex.  Is it better for Alex to receive the land by gift or by inheritance? Explain your answer.

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Answer #1

It is better for Alex to take Property as in inheritance .Not in gift

Reason:

With a gift, the giver (not the receiver) is responsible for reporting it on their taxes, but only if the gift's value exceeds $14,000.

With an inheritance, the receiver is responsible for reporting the inheritance. Usually, the inheritance itself isn't taxable but any income produced as a result of the inheritance is taxable

Here Alex is not selling the property he is just receiving it hence it is not taxable in his hand.

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