David Gave Property with a Basis of $133,000 to Hannah

question 84

Multiple Choice

David gave property with a basis of $133,000 to Hannah when the property had a FMV of $100,000 and paid gift taxes of $8,000.If Hannah later sells the property for $140,000,Hannah's basis (to determine gain) in the property immediately before the sale is

• A)$100,000.
• B)$108,000.
• C)$133,000.
• D)$141,000.

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Definitions:

Target Cost

The maximum amount that can be spent on a product to ensure a desired profit margin is achieved.

Market Dictated Price

The price of a good or service as determined by the supply and demand dynamics in the open market.

Markup Percentage

A percentage added to the cost price of goods to cover overhead and profit.

Total Cost Concept

An accounting principle that sums all costs associated with the production of a good or service, including direct, indirect, fixed, and variable costs.