Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

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Roberta's basis in the land is $50,000, but since it has a lower FMV of $40,000, she can only use the FMV to calculate any gain or loss when she sells it. Thus, her loss is $4,000 ($40,000 FMV - $36,000 sale price).

Miguel Gives Roberta Land with an Adjusted Basis of $50,000