Question

Shontelle received a gift of income-producing property with an adjusted basis of $49,000 to the donor and fair market value of $35,000 on the date of gift. No gift tax was paid by the donor. Shontelle subsequently sold the property for $31,000. What is the recognized gain or loss?

Answer 1

The recognized gain or loss is -$4000.

Step-by-step explanation:

Gift property value = $49000

fair market value = $35000

realized loss = sale price - fair market value

= $31000 - $35000

= -$4000

Therefore, The recognized gain or loss is -$4000.