In the current year,Andrew received a gift of property from his uncle.At the time of the gift,the property had a FMV of $114,000 and an adjusted basis to his uncle of $70,000.After deducting the annual exclusion,the amount of the gift was $100,000.Andrew's uncle paid a gift tax on the property of $24,000.What is the amount of Andrew's basis in the property?
A)$70,000
B)$80,560
C)$94,000
D)$114,000

Question

Quizplus · Accepted Answer

B)Andrew's basis is the sum of his uncle's basis in the property plus the share of the gift tax attributable to the appreciation as of the gift date.$70,000 + [$24,000 × ($114,000 - $70,000)/$100,000] = $80,560

In the Current Year,Andrew Received a Gift of Property from His