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15 July, 03:38

In 2017, Holly received a gifted land from her aunt (donor's adjusted basis was $98,000) and the fair market value was $112,000 on the date of gift. This year, Holly sold this land for $102,000. What is Holly's basis in the land and her recognized gain or loss?

A. $98,000, and a gain of $4,000B. $112,000, and a loss of $10,000C. $102,000, and a gain of $4,000D. $102,000, and no gain and loss is recognized. E. None of these.

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  1. 15 July, 03:42
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    Correct answer is A.

    Holly's basis is $98,000

    Recognized Gain is $4,000

    Explanation:

    Holly's basis = Carryover basis = $98,000

    Recognized gain = Sale value - Basis

    = $102,000 - $98,000

    = $4,000
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