Question

On July 31, 2018, Jessica-Anne received land and a building from Janice as a gift. Janice's adjusted basis and the fair market value at the date of the gift are as follows:

Asset	Adjusted Basis	FMV
Land	$200,000	$260,000
Building	$640,000	$700,000

Janice paid gift tax of $60,000 on the transfer. Round any division to four decimal places. Round your final answers to the nearest dollar. a. Determine Jessica-Anne's adjusted basis for the land and building.

Determine Jessica-Anne's adjusted basis for the land and building.

a) Jessica-Anne's total basis for the assets received from Janice is $ ______

b) Jessica-Anne's total basis for the land is $ ______

c) Jessica-Anne's total basis for the building is $ _______

Answer 1

a.)	Jessica-Anne's total basis for the assets received from Janice
	Adjusted basis for Jessica-Anne's = Janice basis+(Appreciation/market value x Gift tax)
	= 200,000+((260,000-200,000)/(260,000 x 60,000))
	= 200,000+13846.15
	=$ 213,846
	Adjusted basis of building = 640,000+((700,000-64,000/700,000 x 60,000))
	= 640,000+5,142.85
	= $645,143
	Total basis for assets received	$ 858,989	( 213,846 +645,143 )
b.)	Jessica-Anne's total basis for the land	$ 213,846
c.)	Jessica-Anne's total basis for the building	$ 645,143