Sale of property received as a gift during the current year

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Sale of Property Received as a Gift. During the current year, Stan sells a tract of land for $800,000. The property was received as a gift from Maxine on March 10, 1995, when the property had a $310,000 FMV. The taxable gift was $300,000 because the annual exclusion was $10,000 in 1995. Maxine purchased the property on April 12, 1980, for $110,000. At the time of the gift, Maxine paid a gift tax of $12,000. In order to sell the property, Stan paid a sales commission of $16,000.

a. What is Stan's realized gain on the sale?
b. How would your answer to Part a change, if at all, if the FMV of the gift property was $85,000 as of the date of the gift?

Reference no: EM13604798

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