During the Current Year,Don's Aunt Natalie Gave Him a House

question 45

Multiple Choice

During the current year,Don's aunt Natalie gave him a house.At the time of the gift,the house had a FMV of $144,000 and his aunt's adjusted basis was $133,000.After deducting the annual exclusion,the amount of the gift was $130,000.His aunt paid a gift tax of $20,000 on the house.What is Don's basis in the house for purposes of determining gain?

• A)$130,000
• B)$133,000
• C)$134,692
• D)$144,000

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Definitions:

Cost Curves

Graphs in economics that show how the cost of producing a good or service varies with the quantity produced.

Total Costs

The sum of all expenses incurred by a business in producing goods or services, including both fixed and variable costs.

Profit Maximizing

The process or strategy employed by a firm to determine the price, output level, or operational scale that leads to the highest possible profit.

Efficient Level

The optimum point at which a particular function, operation, or activity is most effective or produces the best results with the least waste of resources.