Joseph Converts a Building (Adjusted Basis of $50,000 and Fair

question 190

Essay

Joseph converts a building (adjusted basis of $50,000 and fair market value of $40,000) from personal use to business use. Justin receives a building with a $40,000 fair market value ($50,000 donor's adjusted basis) from his mother as a gift. Discuss the tax consequences with respect to Joseph's and Justin's adjusted basis.

---

Definitions:

Satisfaction

The feeling of pleasure or fulfillment that comes from meeting or exceeding expectations.

Maslow

Referenced to Abraham Maslow, a psychologist known for creating Maslow's hierarchy of needs, a theory of psychological health predicated on fulfilling innate human needs in priority.

Social Needs

The essential human requirements for interaction, belonging, and companionship, often motivating behavior within societal contexts.

Physiological

Relating to the functions and activities of living organisms and their parts, including all physical and chemical processes.