Reference no: EM131954748

Sally Robbins gifted depreciable business equipment to her brother, John. Which of the following statement with respect to that gift is NOT correct?

a. Sally reports the gift on Form 709 at its current fair market value

b. John;s basis in the property is the same as Sally's adjusted basis at the time of the gift

c. John must report any gain on his sale of the equipment as Section 1245 recapture (ordinary income) to the extent of the depreciation claimed by Sally, whether or not he uses the property for business purposes

d. Sall must report gain on her Form 1040 equal to the difference between the valu and the adjusted basis of the property or the total depreciation she claimed whichever is less

2. In which of the following situations must a gift tax return be filed (assume all gifts are made in 2016)

a. a person gives his stepdaughter a wedding gift of a $25,000 check

b. a person gives his alma mater a gift by check for $25,000

c. a person gives his spouse (a U.S. citizen) a gift of $25,000

d. a person gives his church a gift of $25,000. This is the only gift given in 2015.