Miguel Gives Roberta Land with an Adjusted Basis of $50,000

question 9

Multiple Choice

Miguel gives Roberta land with an adjusted basis of $50,000 and an FMV of $40,000. No gift tax is paid. Roberta sells the land for $36,000. Roberta recognizes

• A)no loss.
• B)a $4,000 loss.
• C)a $14,000 loss.
• D)none of the above

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Definitions:

Availability Heuristic

An intellectual simplification employed when the examples readily thought of are used to assess a particular matter, notion, method, or judgement.

Time Inconsistency

is a situation where a person's preferences change over time, such that what they choose today may differ from what they will choose in the future, often leading to decision-making challenges.

Present

The current moment or period in time.

Future

Refers to the time that is yet to come, also used in finance as a contract to buy or sell an asset at a predetermined future date and price.