IMPACT OF GIFT TAX ON BASIS: EXAMPLE
01.Core Concepts
Jena received a gift from Brooks on June 15 of this year that had a FMV of $20,000. Brooks' adjusted basis in the asset was $15,000, and he paid a gift tax on the transfer of $800. (Assume that a previous gift equal to the gift tax annual exclusion amount was made earlier in the year.) • Jena’s basis in the gifted property is $15,200 • Calculation: $15,000 + ($5,000/$20,000 x $800)