Jan sells her yacht to her son for $750,000. The fair market value of the yacht at...
- Jan sells her yacht to her son for $750,000. The fair market value of the yacht at the time of the sale is $1.2 million. The amount of this bargain sale transaction that may be subject to gift tax is:
|
$300,000 |
||
|
$750,000 |
||
|
$450,000 |
||
|
$1,200,000 |
Homework Answers
As the yacht is sold at a value which is less than it fair market value, the amount chargeable to gift tax :
= Fair market value- Sale consideration
= $1200000 - $750000
= $450000
Third option is the correct answer.
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