Curt has owned the following assets for a number of years which he gives to his daughter Carla. No gift tax results. Fair Market
$\begin{array} { c c } &\text { Basis } & \text { Value } \
\text { Land }&\$ 200,000 & \$ 400,000 \
\text { Securities }&800,000 & 600,000 \end{array}$ If Carla immediately sells these assets for $1 million $400,000 + $600,000), she recognizes:

Question

Curt has owned the following assets for a number of years which he gives to his daughter Carla. No gift tax results. Fair Market
$\begin{array} { c c } &\text { Basis } & \text { Value } \ 
\text { Land }&\$ 200,000 & \$ 400,000 \ 
\text { Securities }&800,000 & 600,000 \end{array}$ If Carla immediately sells these assets for $1 million $400,000 + $600,000), she recognizes:

Quizplus · Accepted Answer

When assets are gifted, the recipient assumes the donor's basis in the assets for the purpose of calculating gain or loss upon sale. For the land, Carla's basis is $200,000, and she sells it for $400,000, realizing a long-term capital gain (LTCG) of $200,000. For the securities, Carla's basis is $800,000, and she sells them for $600,000. However, losses on sales of personal use property are not recognized for tax purposes, so she recognizes no loss on the securities.

Curt Has Owned the Following Assets for a Number of Years