Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions

American College Exam HS330 Topic 1 Question 85 Discussion

Actual exam question for American College's HS330 exam
Question #: 85
Topic #: 1
[All HS330 Questions]

A father bought stock for $100,000 and gave it to his son when it was worth $300,000. The father paid no gift tax on the transfer. When the son sold the property 2 years after the gift, his income tax basis was

Show Suggested Answer Hide Answer
Suggested Answer: D

Contribute your Thoughts:

Arthur
26 days ago
Haha, this is a tricky one. I bet the IRS would love to get their hands on that extra $200,000 in taxes. Better go with D just to be safe.
upvoted 0 times
...
Emmett
27 days ago
Wait, what? If the father paid no gift tax, then the son's basis should be the full $300,000. D is the right answer here.
upvoted 0 times
Kenny
8 days ago
No, the son's basis should be the full $300,000 in this case.
upvoted 0 times
...
Afton
16 days ago
But wouldn't the son's basis be $0 since the father paid no gift tax?
upvoted 0 times
...
Marylin
20 days ago
I think the answer is D) $300,000.
upvoted 0 times
...
...
Hannah
2 months ago
Hmm, I'm not so sure. Doesn't the son inherit the full market value as the basis when it's gifted? I'll go with D.
upvoted 0 times
Evette
29 days ago
D) $300,000
upvoted 0 times
...
Aliza
1 months ago
A) 0
upvoted 0 times
...
...
Filiberto
2 months ago
I agree, the son's income tax basis should be $300,000.
upvoted 0 times
...
Galen
2 months ago
Oh, I think the answer is B. The basis is the original cost to the father, which was $100,000.
upvoted 0 times
Phil
23 days ago
I agree with you, it's D. The basis is the fair market value at the time of the gift, which was $300,000.
upvoted 0 times
...
Lou
25 days ago
I'm pretty sure it's D. The basis is the fair market value at the time of the gift, which was $300,000.
upvoted 0 times
...
Dion
29 days ago
No, I believe the answer is C. The basis is the fair market value at the time of the gift, which was $300,000.
upvoted 0 times
...
Shawnta
1 months ago
I think the answer is B. The basis is the original cost to the father, which was $100,000.
upvoted 0 times
...
...
Chana
2 months ago
I believe it was $300,000 since that was the value when he received it.
upvoted 0 times
...
Aliza
2 months ago
What do you think the son's income tax basis was?
upvoted 0 times
...

Save Cancel