Marge sells land to her adult son, Jason, for its $20,000 appraised value.Her adjusted basis for the land is $25,000.
Marge's recognized loss is $5,000, and Jason's adjusted basis for the land is $25,000 ($20,000 cost + $5,000 recognized lossof Marge).

Question

Quizplus · Accepted Answer

Marge cannot recognize a loss on the sale of property to a related party, such as her son Jason. Her recognized gain or loss is zero, and Jason's basis is equal to Marge's adjusted basis of $25,000.

Marge Sells Land to Her Adult Son, Jason, for Its