John was given a residence in the current year. At the time of the gift, the...
John was given a residence in the current year. At the time of the gift, the residence had a fair market value of $250,000, and its adjusted basis to the donor was $130,000. The donor paid a tax of $12,000 on the taxable gift of $236,000. What is John’s basis for gain?
a- $130,000.
b- $136,102.
c- $142,000.
d- $250,000.
e- $236,000.
Homework Answers
Answer is option B
b- $136,102.
John’s basis for gain = adjusted basis + proportional gift tax = 130000 + ((250000-130000)/236000*12000) = 130000+6102= $136102
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