Joycelyn Gave a Diamond Necklace to Her Granddaughter Emma

question 1582

Multiple Choice

Joycelyn gave a diamond necklace to her granddaughter Emma. Joycelyn had purchased the necklace in 1980 for $20,000. The FMV of the necklace at the time of the gift was $50,000. After deducting the annual exclusion, the amount of the gift was $35,000. Gift taxes of $10,000 were paid. What is Emma's adjusted basis in the necklace?

• A) $50,000
• B) $28,571
• C) $20,000
• D) $30,000

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Definitions:

Small Subunit

A component of a larger complex, often referring to the smaller of two subunits in a ribosome where mRNA translation begins.

Structural Proteins

Proteins that provide support and shape to cells and tissues, contributing to the structural integrity of organisms, like collagen and keratin.

Codons

Triplets of nucleotides in mRNA that specify which amino acid will be added next during protein synthesis.

Amino Acids

Organic compounds that serve as the building blocks of proteins, each containing an amino group, a carboxylic group, and a unique side chain.