Gabriella purchased a house for $85,000 in 2007. On May 5, 2019, she made a gift of the house to her cousin, Marcel. At the time of the transfer, it was worth $160,000. Marcel died on November 16, 2019. He left the house to Gabriella in his will. At the time of Marcel's death, the house was worth $165,000. Gabriella still owns the house. What is Gabriella's basis in the house? 1) $85,000 2) $160,000 3) $165,000 4) it depends on whether Gabriella sells it at a gain or a loss.
3)$165000
At the time of Gift by Gabriella , the basis in the hand of Marcel will be carryover value of asset ie $85000
The Rule as for the basis of Gift is that when the property is being transfer before death ie as a gift then the basis in the hand of receipient is the carryover value ie the cost value of the giver . Hence the basis in the hand of Marcel is $85000.
Now this property being inheritated as a will back to Gabriella.
The basis of property inherited from a decedent is as per the rule is the FMV value on the date of death of decendent.
Hence in given case FMV value will be the basis of Grabriella basis in house.
Gabriella purchased a house for $85,000 in 2007. On May 5, 2019, she made a gift...
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