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 $145,000 and his aunt's adjusted basis was $134,000.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)$134,000
• C)$135,692
• D)$145,000

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Definitions:

Non-Negative Profit

A profit that is zero or positive, indicating that a business is not losing money.

Economic Profit

The financial gain obtained by a firm or individual after subtracting all explicit and implicit costs from total revenue, often indicating the efficiency and profitability of business operations.

Short Run

A time period in economics during which at least one input is fixed while others are variable.

Produce

Fresh agricultural products such as fruits, vegetables, and other food crops that are grown and harvested.