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chapter 14 handout - Gain Basis Loss Basis Donor’s basis...

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Individual Tax Accounting & Planning – 2011 Chapter 14         Proceeds (Gross proceeds – selling expenses)   (Adjusted Basis)  Cost Basis Realized Gain/Loss + Capital additions - Capital recoveries (e.g. depreciation) Adjusted Basis Realized does NOT mean  Recognized (that is, on the tax return) Cost Basis:  Is fair market value on the date of acquisition, unless  Acquired by Gift Gift Basis:  Is the fair market value at the date of the gift greater than the donor’s adjusted basis? Yes,   No,   Donee takes  donor’s basis
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Unformatted text preview: Gain Basis Loss Basis + Donor’s basis Fair market value Adjustment for at date of gift Gift Tax Paid Unrealized appreciation X Gift Tax Paid Taxable Gift (fair market value – annual gift exclusion) What is the Holding Period in the hands of the Donee? Gain Loss Carry-over holding period Holding period begins on the date of the gift If the asset is used for business or income producing purposes, the basis used for depreciation is the Gain Basis. 1...
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