Jim makes a gift of property basis of $800,000; fair market value of $600,000) to his wife, Molly. Six months later Molly dies, and under her will, the property now worth $700,000) returns to Jim. Jim's income tax basis in the property now is $800,000.

Question

Quizplus · Accepted Answer

Jim's income tax basis in the property would be $700,000, the fair market value of the property at the time of Molly's death, not the original $800,000 basis when he first gifted the property.

Jim Makes a Gift of Property Basis of $800,000; Fair