American College HS330 Exam - Topic 1 Question 11 Discussion

Question

Believing that his death was imminent, a widower gave his son some real estate two years ago and filed a timely gift tax return. The widower died on January 1st of this year. The additional facts are:

Widower's basis in the real estate $400,000

Value of the real estate when gifted 1,000,000

Value of the real estate on date of death 2,000,000

Amount of gift tax paid by widower 345,800

Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:

Herminia · Accepted Answer

D) The son's income tax basis in the real estate is $2,000,000.

Herminia · Answer

A) The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift

Herminia · Answer

B) The gift tax paid is brought back into the widower's gross estate at $345,800.

Herminia · Answer

C) The widower recognized no gain for income tax purposes at the time the gift was made.