Pam makes a gift of land (basis of $312,000; fair market value of $912,000)to her granddaughter,Tracy.As a result of the transfer,Pam paid a gift tax of $45,000.Tracy's income tax basis in the land is:

Question

Quizplus · Accepted Answer

If the gift was made before 1977,the full amount of the gift tax is included.Thus,the answer would be $357,000 ($312,000 + $45,000)-compare choice d.If the gift was made after 1976,the gift tax of $30,000 [($600,000 × $900,000)× $45,000 = $30,000] attributable to the appreciation is added to $312,000.

Pam Makes a Gift of Land (Basis of $312,000; Fair