Question

On April 5, 2018, Ryan received land and a building from Thom as a gift. Thom's adjusted basis and the fair market value at the date of the gift are as follows:

Asset	Adjusted Basis	FMV
Land	$40,000	$35,000
Building	$110,000	$90,000

Thom paid gift tax of $8,000 on the transfer.

Assume instead that the fair market value of the land is $53,000 and the fair market value of the building is $120,000. Determine Ryan's adjusted basis for the land and building.

a) Ryan's total basis for the assets received from Thom is $ ______

b) Ryan's adjusted basis for the land is $ _______

c) Ryan's adjusted basis for the building is $ ________

Answer 1

a) Ryan's total basis for the assets received from Thom is	$       1,50,000
	Adjusted Basic
LAND	$           40,000
BUILDING	$       1,10,000
	$       1,50,000
b) Ryan's adjusted basis for the land is	$           42,000
FMV of Land	$           35,000
Basic Value of total asset received	$       1,50,000
Adjusted basis of the land	$           42,000
(35000/125000)*150000
c) Ryan's adjusted basis for the building is	$       1,08,000
FMV of Building	$           90,000
Basic Value of total asset received	$       1,50,000
Adjusted basis of the Building	$       1,08,000
(90000/125000)*150000