Taxation of Gifts - CPA Regulation (REG)
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In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
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A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
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If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
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Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
Compare your answer with the correct one above
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
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A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
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If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
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Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
Compare your answer with the correct one above
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
Compare your answer with the correct one above
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
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If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
Compare your answer with the correct one above
Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
Compare your answer with the correct one above
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In Year 4, Julie received a gift of 20 shares stock valued at \$30 per share from an uncle that the uncle had held since Year 1. In Year 1, the stock was purchased at \$20 per share. At the date of the gift, the basis and holding period of the gift were:
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
In a gift transaction, typically the donor’s basis and holding period pass to the recipient. So, since the stock was originally purchased three years ago at \$20 per share, the 20 shares have a basis of \$400 and a long-term holding period.
Compare your answer with the correct one above
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
A taxpayer inherited property from a deceased relative. The fair market value at the date of death was \$20,000. An alternative valuation date was elected by the executor of the estate. The property was worth \$18,000 six months later and was worth \$24,000 when it was distributed to the taxpayer 9 months later. It had a cost basis to the deceased of \$4,000. If the beneficiary sold the property for \$23,000, what would be the recognized gain by the taxpayer and the nature of the gain?
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
For inheritance, the basis of the donor passes to the beneficiary. The value, however, is the FMV at the time of death or at an alternative valuation date no more than six months from the date of death (if elected). Since the alternative valuation date was elected, the basis of the property to the beneficiary was \$18,000. So, if the taxpayer then sold the property for \$23,000, the recognized gain would be a long-term gain of \$5,000.
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If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
If a gift of property has a fair market value below the donor’s basis, what is the basis and the holding period of the gift to the recipient?
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
Generally, a donor’s basis and holding period passes onto the recipient. However, if the FMV is below the donor’s basis, then the recipient’s basis is FMV and the holding period starts at the date of the gift (thus being short-term).
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Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
Per tax regulations for the year 2020, of a decedent’s estate, which amount would be effectively the maximum applicable for estate and a gift tax credit?
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
The actual amount tax-free would go up to \$11,580,000 however of the answers provided, \$11,000,000 is the largest. \$15,000 is the amount for the annual gift tax exclusion.
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Parent gave securities with an adjusted basis of \$10,000 and fair market value of \$9,000 to a child. Later the child sold the securities for \$7,000. What is the child’s basis for the securities sold?
Parent gave securities with an adjusted basis of \$10,000 and fair market value of \$9,000 to a child. Later the child sold the securities for \$7,000. What is the child’s basis for the securities sold?
The general rule with gifts is that the donor’s basis rolls over to the recipient. The exception, however, is when FMV at the time of transfer is lower than the donor’s basis and the recipient sells the assets at a price lower than the FMV at the time of transfer. In this case, the recipient’s basis in the sold stock was the FMV at the time of the gift.
The general rule with gifts is that the donor’s basis rolls over to the recipient. The exception, however, is when FMV at the time of transfer is lower than the donor’s basis and the recipient sells the assets at a price lower than the FMV at the time of transfer. In this case, the recipient’s basis in the sold stock was the FMV at the time of the gift.
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Ann purchased 100 shares of stock for \$50 per share. Ten years later, Ann died on February 1 and bequeathed the 100 shares of stock to a relative, Blake, when the stock had a market price of \$100 per share. One year later, on April 1, the stock split 2 for 1. Blake gave 100 shares of the stock to another of Ann’s relatives, Greg, on June 1 that same year, when the market value of the stock was \$150 per share. What was Greg’s basis in the 100 shares of stock when acquired on June 1?
Ann purchased 100 shares of stock for \$50 per share. Ten years later, Ann died on February 1 and bequeathed the 100 shares of stock to a relative, Blake, when the stock had a market price of \$100 per share. One year later, on April 1, the stock split 2 for 1. Blake gave 100 shares of the stock to another of Ann’s relatives, Greg, on June 1 that same year, when the market value of the stock was \$150 per share. What was Greg’s basis in the 100 shares of stock when acquired on June 1?
In an inheritance, unless an alternative valuation date is selected the beneficiary’s basis in the received property is the FMV at the time of the donor’s death (here, 100 stocks at \$100 per share, or \$10,000). At the split, the basis remained the same, but the value and number of stocks changed (now 200 stocks at \$50, still \$10,000 total). In a gift, typically the recipient’s basis is that of the donor’s, which means that Greg received 100 stocks with a basis of \$50 per share, or a total basis of \$5,000.
In an inheritance, unless an alternative valuation date is selected the beneficiary’s basis in the received property is the FMV at the time of the donor’s death (here, 100 stocks at \$100 per share, or \$10,000). At the split, the basis remained the same, but the value and number of stocks changed (now 200 stocks at \$50, still \$10,000 total). In a gift, typically the recipient’s basis is that of the donor’s, which means that Greg received 100 stocks with a basis of \$50 per share, or a total basis of \$5,000.
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On February 1, Year 3, Howard learned that he was bequeathed 500 shares of common stock under his mother’s will. Howard’s mother had paid \$2,500 for the stock 10 years ago. Fair market value of the stock on February 1, Year 3, the date of his mother’s death, was \$4,000 and had increased to \$5,000 six months later. The executor of the estate elected the alternative valuation date for estate tax purposes. Howard sold the stock for \$4,500 on June 1, Year 3, the date that the executor distributed the stock to him. How much income should Howard include in his Year 3 individual income tax return for the inheritance of the 500 shares of stock that he received from his mother’s estate?
On February 1, Year 3, Howard learned that he was bequeathed 500 shares of common stock under his mother’s will. Howard’s mother had paid \$2,500 for the stock 10 years ago. Fair market value of the stock on February 1, Year 3, the date of his mother’s death, was \$4,000 and had increased to \$5,000 six months later. The executor of the estate elected the alternative valuation date for estate tax purposes. Howard sold the stock for \$4,500 on June 1, Year 3, the date that the executor distributed the stock to him. How much income should Howard include in his Year 3 individual income tax return for the inheritance of the 500 shares of stock that he received from his mother’s estate?
Gifts, whether from a living or deceased donor, are not taxable to the beneficiary, on the donor or the donor’s estate. In this case, Howard would only report a gain or loss for income tax purposes if he had sold the stock at a different value than the stock’s value on the alternative valuation date.
Gifts, whether from a living or deceased donor, are not taxable to the beneficiary, on the donor or the donor’s estate. In this case, Howard would only report a gain or loss for income tax purposes if he had sold the stock at a different value than the stock’s value on the alternative valuation date.
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This year, Brad gave \$5,000 cash to his nephew, canceled \$3,000 of the same nephew’s debt, donated \$1,500 to a political party, and gave \$1,200 of municipal bonds to a parent. What is the amount of Brad’s gifts before considering the gift tax annual exclusion?
This year, Brad gave \$5,000 cash to his nephew, canceled \$3,000 of the same nephew’s debt, donated \$1,500 to a political party, and gave \$1,200 of municipal bonds to a parent. What is the amount of Brad’s gifts before considering the gift tax annual exclusion?
In general, taxable gifts include every transfer of property for less than full consideration. This would include the gift of \$5,000, the cancellation of debt, and the \$1,200 of municipal bonds. However, donations such as to the political party are excluded.
In general, taxable gifts include every transfer of property for less than full consideration. This would include the gift of \$5,000, the cancellation of debt, and the \$1,200 of municipal bonds. However, donations such as to the political party are excluded.
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