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Acc483 week4

# Acc483 week4 - I 5-34 Doug receives a duplex as a gift from...

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I: 5-34 Doug receives a duplex as a gift from his uncle. The uncle’s basis for the duplex and land is \$90,000. At the time of the gift, the land and building have FMVs of \$40,000 and \$80,000, respectively. No gift tax is paid by Doug’s uncle at the time of the gift. A. To determine gain, what is Doug’s basis for the land? \$40,000 B. To determine gain, what is Doug’s basis for the building? \$80,000 C. Will the basis of the land and building be the same as in Parts a & b for purposes of determining a loss? Correct, the loss would be the same. I: 5-38 Daniel receives 400 shares of A&M Corporation stock from his aunt on May 20, 2006, as a gift when the stock has a \$60,000 FMV. His aunt purchased the stock in 1999 for \$42,000. The taxable gift is \$60,000 because she made earlier gifts to Daniel during 2006 and used the annual exclusion. She paid a gift tax of \$9,300 on the gift of A&M stock to Daniel. Daniel also inherited 300 shares of Longhorn Corporation preferred stock when his uncle died on November 12, 2006, when the stock’s FMV was \$30,000. His uncle purchased the stock in 1990 for \$27,600. Determine the gain or loss on the sale of A&M and Longhorn stock on December 15, 2006, under each alternative situation below.

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