Answered

Parrot received land as a gift with a fair market value of $5,000. The land was purchased by the donor for $8,000. The land is sold for $6,000. What amount of gain should be reported?

Answer :

truonghanhduyen

Answer:

Loss of $2,000

Explanation:

In this scenario, we have the following information:

• The adjusted cost basis: $8,000 (the amount paid by the donor)

• The fair market value: $5,000  

• The sold amount: $6,000

Parrot’s basis in the land is $8,000, as same basis the donor had.  

So when he sells it, he must report loss of $2,000 on the sale.

Other Questions