Asked by Gustavo Perez-Ramirez on Jun 21, 2024
Verified
If the property's fair market value at the date of the gift is lower than the adjusted basis,then the property's basis for determining loss is its fair market value on that date.
Adjusted Basis
The net cost of an asset after adjusting for various tax-related items including improvements, sales, depreciation, and damage.
- Distinguish between the basis for gain and the basis for loss in gift property transactions.
Verified Answer
IG
Israel GarciaJun 25, 2024
Final Answer :
True
Explanation :
When the fair market value of the property at the date of the gift is lower than its adjusted basis, the basis for determining loss is its fair market value on that date. This is because the adjusted basis is no longer relevant for determining the loss since the property has been given as a gift.
Learning Objectives
- Distinguish between the basis for gain and the basis for loss in gift property transactions.