Final answer:
The best gift for Brandon to give his daughter Dena from an income tax perspective would be cash with a basis of $10,000, as it does not generate any taxable event at the time of the gift.
Step-by-step explanation:
The best item for Brandon to gift to Dena from an income tax position would be the option that has the least impact on taxable gains. Gifts are not typically considered taxable income for the recipient, but future sales of gifted assets can have tax implications depending on the original owner's basis in the asset. Gifting cash with a basis of $10,000 (Option A) would have no direct income tax impact because cash does not have a capital gain. If Brandon gifts the appreciated stock (Option B), when Dena sells it, she might owe capital gains taxes on the difference between the fair market value and the basis (which would be $30,000 if she sold it for its current value). If he gifts the depreciable rental property (Option C), there could be a depreciation recapture if Dena sells the property. Lastly, gifting the personal residence (Option D) can result in a capital gains tax for Dena based on the difference between the fair market value and the basis if she sells the residence.
In summation, gifting cash does not generate any taxable event at the time of the gift and would likely be the best option for Brandon's income tax position, assuming there is no gift tax involved. Note that this is a general guideline and specific tax advice should be sought from a tax professional.