Rob was given a residence in 2013.At the time of the gift,the residence had a fair market value of $201,000,and its adjusted basis to the donor was $141,000.The donor paid a gift tax of $10,000 on the taxable gift of $187,000.What is Rob's basis for gain?

Question

Quizplus · Accepted Answer

Rob's basis for gain is equal to the donor's adjusted basis plus any gift tax paid on the taxable gift, which is $141,000 + ($10,000/$187,000)*($201,000-$141,000) = $141,000 + $3,200 = $144,200.

Rob Was Given a Residence in 2013