What is Mary holding period in the asset

Assignment Help Financial Accounting

Reference no: EM132792461

Question -

Part 1: Mary received a gift of income-producing property with an adjusted basis of $49,000 to the donor and fair market value of $35,000 on the date of gift. No gift tax was paid by the donor. She subsequently sold the property for $41,000.

A) What is the recognized gain or loss?

B) What is the recognized gain or loss if the taxpayer later sells the property for $30,000 or $55,000?

C) What is Mary's holding period in the asset under each of these scenarios?

D) Under which of these scenarios would you suggest (or not suggest) that Mary make a gift of the property?

Part 2: What if Mary passed away when the asset had an adjusted basis of $49,000 and a FMV of $55,000.

A) What would the basis of the property be to Mary's heir?

B) If Mary's heir sold the property six months after she died for $57,000, what would be the heir's holding period and recognized gain (or loss)?

C) Is it generally better to leave appreciated or depreciated property to your heirs? Why?

Reference no: EM132792461

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