Mel gives a parcel of land to his son,Scott.He had purchased the land in 1997 for $140,000 and its fair market value on the date of the gift is $125,000.No gift tax is paid.Scott subsequently sells the land for $131,000.

Question

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The Answer is

Note that a realized gain of $6,000 results if the basis for loss is used.
Since the amount realized of $131,000 is between Scott's loss basis of $125,000 and gain basis of $140,000,neither gain nor loss results.

Mel Gives a Parcel of Land to His Son,Scott