Question

Ramon received a gift of stock from his uncle. The basis of the stock to his uncle was $25,000, and it had a FMV of $18,000 at the date of the gift. The donor held the property for more than one year. Complete the following chart under the independent situations shown: - Use current tax laws

	Situation 1	Situation 2	Situation 3
Donor’s basis	$25,000	$25,000	$25,000
FMV at gift date	18,000	18,000	18,000
Ramon’s selling price	30,000	15,000	20,000
Basis to Ramon	——–—	——–—	——–—
Taxable gain (if any)	——–—	——–—	——–—
Deductible loss (if any)	——–—	——–—	——–—

Answer 1

Answer:

	Situation 1	Situation 2	Situation 3
Donor's Basis	$25,000	$25,000	$25,000
FMV at gift date	$18,000	$18,000	$18,000
Romon's selling price	$30,000	$15,000	$20,000
Basis to Romon	$25,000	$18,000	N/A
Taxable gain (if any)	$5,000	N/A	no gain
Deductible loss (if any)	N/A	$3,000	no loss