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American College HS330 Exam - 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

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Suggested Answer: D

by Emilio at Apr 25, 2024, 09:12 PM

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Anabel
6 months ago
Nope, it’s definitely $100,000.
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Isabella
6 months ago
I thought gifts had different tax rules, this seems off.
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Jamika
6 months ago
Wait, isn't it $300,000 since that's the market value?
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Oren
7 months ago
Totally agree, that's how it works!
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Santos
7 months ago
The son's basis is $100,000.
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Jamal
7 months ago
I’m really unsure about this one. Could it be $300,000 since that was the value when the son received it?
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Minna
7 months ago
This question feels familiar; I think we did a similar one in class. The answer was definitely not zero, right?
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Orville
7 months ago
I remember something about carryover basis in gift situations, so I’m leaning towards $100,000 too, but I’m not completely sure.
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Bette
8 months ago
I think the basis should be the same as what the father paid, so maybe $100,000?
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Evette
8 months ago
I think the key here is that the father paid no gift tax. That means the son's basis is the father's original cost, which was $100,000.
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Christiane
8 months ago
Okay, I've got this. The basis is the original cost to the father, which was $100,000. That's the answer.
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Queen
8 months ago
Hmm, I'm a bit confused on how the basis is calculated when there's a gift involved. I'll have to review that concept.
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Magdalene
8 months ago
This looks like a tricky tax question. I'll need to think through the basis rules carefully.
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Chaya
8 months ago
Wait, I'm not sure. Didn't the son receive the stock as a gift? Wouldn't the basis be the fair market value at the time of the gift?
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Latanya
8 months ago
Hmm, this one seems straightforward. I think the key is remembering how the DIS election works in IS-IS with default priorities.
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Alexia
8 months ago
Okay, let's see here. The instructions mention "how to" so I'm guessing the answer is going to be one of the action-oriented options like A, B, or C. I'll eliminate the ones that don't seem to fit and try to narrow it down from there.
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Melita
8 months ago
Easy peasy! Just pick spots with power, hide the APs, and make sure they're easy to get to. Simple!
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Fernanda
8 months ago
I'm leaning towards management support as missing since it seems like they only just decided to adopt reviews, but I wonder if training was also insufficient in this scenario.
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Arthur
1 year 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.
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Emmett
1 year 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.
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Kenny
1 year ago
No, the son's basis should be the full $300,000 in this case.
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Afton
1 year ago
But wouldn't the son's basis be $0 since the father paid no gift tax?
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Marylin
1 year ago
I think the answer is D) $300,000.
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Hannah
1 year 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.
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Evette
1 year ago
D) $300,000
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Aliza
1 year ago
A) 0
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Filiberto
1 year ago
I agree, the son's income tax basis should be $300,000.
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Galen
1 year ago
Oh, I think the answer is B. The basis is the original cost to the father, which was $100,000.
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Phil
1 year 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.
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Lou
1 year 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.
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Dion
1 year 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.
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Shawnta
1 year ago
I think the answer is B. The basis is the original cost to the father, which was $100,000.
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Chana
1 year ago
I believe it was $300,000 since that was the value when he received it.
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Aliza
1 year ago
What do you think the son's income tax basis was?
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