During the current year,Don's aunt Natalie gave him a house.At the time of the gift,the house had a FMV of $144,000 and his aunt's adjusted basis was $133,000.After deducting the annual exclusion,the amount of the gift was $130,000.His aunt paid a gift tax of $20,000 on the house.What is Don's basis in the house for purposes of determining gain?

Question

Quizplus · Accepted Answer

C)Don's basis is the sum of his aunt's basis in the property plus the share of the gift tax attributable to the appreciation as of the gift date.$133,000 + [$20,000 × ($144,000 - $133,000)/$130,000] = $134,692.

During the Current Year,Don's Aunt Natalie Gave Him a House