Question

On December 20, 2019, Deb's employer gave her a Tag Heuer Limited Edition Tom Brady watch because Deb met her sales quota for the year. Deb’s employer originally purchased the watch at the beginning of 2019 for $3,000. At the time Deb received the watch from her employer (Dec. 20, 2019), the price of similar watches had increased to $3,750 because everyone thought that Tom Brady was going to lead the Patriots to another Super Bowl victory. By Dec. 31, 2019, the last day of the tax year, Tag Heuer Limited Edition Tom Brady watches were selling on eBay for $2,000 because Tom Brady was blamed for the Patriots loss to the Miami Dolphins in the playoffs. What is the amount of Deb's gross income, if any, from the receipt of the watch?

Answer 1

Sunce the watch is Receused from employer as a gift its valure will be Farr market value or Cost of aquisition which ever lů lower le But for Gelenlating gross income of the employce for tase purpose, The value of gift will be taken as lost of aquisition or fair Worlat value at the which ever is higher at the date of Reaca Receipt an But for accounting purpo that is $3950 and for accountry purpure The value carried forward will be the lost or fair market value which enor is less that is $8000, cs Scanned with CamScanner