What is the basis of artistic works that have been gifted to another by the creator?
A)Artistic works are capital assets to the creator if they are sold to an unrelated person.
B)Artistic works are not capital assets for the creator or the recipient of the artistic works if given as a gift.
C)Artistic works are capital assets if they were available for sale in an art gallery.
D)Artistic works are not capital assets for the creator but are capital assets in the hands of the recipient if the creator gave the artistic works as a gift.

Question

Quizplus · Accepted Answer

According to IRS regulations, artistic works that are given as gifts are not considered capital assets for either the creator or the recipient. This means that neither party will have to pay capital gains tax if the artwork is sold in the future. However, the recipient will need to pay tax on any income generated from the sale or use of the artwork.

What Is the Basis of Artistic Works That Have Been