On September 18, 2012, Jerry received land and a building from Ted as a gift. Ted had purchased the land and building on March 5, 2009, and his adjusted basis and the fair market value at the date of the gift were as follows:
Ted paid gift tax on the transfer to Jerry of $96,000.

Question

On September 18, 2012, Jerry received land and a building from Ted as a gift. Ted had purchased the land and building on March 5, 2009, and his adjusted basis and the fair market value at the date of the gift were as follows:
  Ted paid gift tax on the transfer to Jerry of $96,000.

Quizplus · Accepted Answer

The Answer is

The basis is allocated to the land and building as follows:
Land: ($200,000/$300,000) ´ $260,070 = $173,380
Building: ($100,000/$300,000) ´ $260,070 = $86,690
Jerry's holding period begins on March 5, 2009.
*The $287,000 is equal to the fair market value of the land and building of $300,000 reduced by the per donee annual exclusion of $13,000.
The basis is allocated to the land and building as follows: Land: ($200,000/$300,000) ´ $260,070 = $173,380 Building: ($100,000/$300,000) ´ $260,070 = $86,690 Jerry's holding period begins on March 5, 2009. *The $287,000 is equal to the fair market value of the land and building of $300,000 reduced by the per donee annual exclusion of $13,000.

On September 18, 2012, Jerry Received Land and a Building