Shontelle received a gift of income-producing property with an adjusted basis of $49,000 to the donor and fair market value of $35,000 on the date of gift.No gift tax was paid by the donor.Shontelle subsequently sold the property for $31,000.What is the recognized gain or loss?
A)$0
B)($4,000)
C)($10,000)
D)($18,000)
E)None of these

Question

Quizplus · Accepted Answer

The gain basis for Shontelle is $49,000 and the loss basis is $35,000.Because the amount realized (sales price)of $31,000 is less than the loss basis of $35,000,the realized loss of $4,000 ($31,000 - $35,000)is recognized.

Shontelle Received a Gift of Income-Producing Property with an Adjusted