In January 2013 and When the Annual Exclusion Was $14,000

question 80

Multiple Choice

In January 2013 and when the annual exclusion was $14,000, Clint makes a gift of his beach house (basis of $114,000; fair market value of $414,000) to his aunt. As a result of the transfer, Clint pays a gift tax of $20,000. The aunt dies in December 2013, when the property is worth $420,000. Under the terms of the aunt's will, the property passes to Clint. Clint's income tax basis in the beach house is:

• A) $119,000.
• B) $129,000.
• C) $114,000.
• D) $420,000.
• E) None of the above.

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Definitions:

Supplier Power

The influence that suppliers have over the potential profits of the businesses they sell to, high supplier power can influence the terms and conditions of supplying goods and can affect price settings.

Buyers

Individuals or organizations that purchase goods or services for personal use, resale, or use in production.

Choices

The range of options available to someone at any given time for making decisions.

Online Banking

A service provided by banks that allows customers to perform financial transactions remotely via the internet.