The basis for depreciation on depreciable gift property received is the donor's adjusted basis of the property at the date of the gift (assuming no gift taxes are paid).The rule applies regardless of whether the fair market value at the date of the gift is greater than or less than the donor's adjusted basis.

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This statement is true. The basis for depreciation on depreciable gift property is determined by the donor's adjusted basis at the date of the gift, regardless of the fair market value. This is outlined in IRS Publication 551.

The Basis for Depreciation on Depreciable Gift Property Received Is