In 2011,José,a widower,sells land (fair market value of $100,000)to his daughter,Linda,for $50,000.José has made a taxable gift of $37,000.

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The taxable gift is calculated by subtracting the amount paid for the property ($50,000) from its fair market value ($100,000), so José has made a taxable gift of $50,000 - $13,000 (the annual exclusion for 2011) = $37,000.

In 2011,José,a Widower,sells Land (Fair Market Value of $100,000)to His