The donee's basis in depreciated property (when the FMV at the time of the gift is less than the donor's basis)is FMV at the time of the gift.

Question

Quizplus · Accepted Answer

The donee's basis in depreciated property, when the fair market value (FMV) at the time of the gift is less than the donor's adjusted basis, is the donor's adjusted basis for determining loss. For determining gain, the donee's basis is the same as the donor's adjusted basis. The FMV is used only if it is lower than the donor's adjusted basis and the property is subsequently sold at a loss.

The Donee's Basis in Depreciated Property (When the FMV at the Time