Joycelyn Gave a Diamond Necklace to Her Granddaughter Emma

question 121

Multiple Choice

Joycelyn gave a diamond necklace to her granddaughter Emma.Joycelyn had purchased the necklace in 1980 for $15,000.The FMV of the necklace at the time of the gift was $44,000.After deducting the annual exclusion,the amount of the gift was $30,000.Gift taxes of $10,000 were paid.What is Emma's adjusted basis in the necklace?

• A)$15,000
• B)$24,667
• C)$25,000
• D)$44,000

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Definitions:

Government

The governing body of a nation, state, or community, responsible for regulation, public policy, and administration of state affairs.

Consumer Surplus

The gap between what consumers are prepared to pay for a product or service and what they end up spending.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service versus what they actually receive, reflecting their net gain.

Tax

A mandatory charge or alternative form of financial levy extracted from a taxpayer by governmental authorities for the aim of supporting governmental spending and numerous public financial commitments.