Morrison Received a Gift of Income-Producing Property with an Adjusted

question 18

Essay

Morrison received a gift of income-producing property with an adjusted basis of $50,000 to the donor and a fair market value of $40,000 on the date of the gift (December 31,2013).The donor paid a gift tax of $1,000.Morrison sells the property on September 17,2013 for $45,000.What is the gain or loss on the property?

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Definitions:

Risk of Loss

denotes the possibility that an asset or investment's value will decrease, reflecting the chance of losing on an investment or possession.

Contract Voided

A legal declaration that a contract is null and void and, therefore, unenforceable as though it never existed.

Partial Inability

A condition where an individual or entity is limited in some capacity but is not completely incapacitated.

Performance Impracticable

A doctrine under which a party may be released from a contract due to the occurrence of unforeseen events making performance impossible or extremely burdensome.