Analyze each transaction below independent of the others and

Analyze each transaction? below, independent of the? others, and determine

Brogan received 700 shares of Cranston Corporation stock from his uncle as a gift on July 20, 2016, when the stock had a $210,000 FMV. His uncle paid $154,000 for the stock on April 12, 2001. The taxable gift was $210,000, because his uncle made another gift to Brogan for $40,000 in January and used the annual exclusion. The uncle paid a gift tax of $21,000. Without considering the transactions below, Brogan\'s AGI is $30,000 in 2017. No other transactions involving capital assets occur during the year Read the requirement. AGI prior to sale of stock+Gain (loss) on sale of stock AGI a. b. C.

Solution

AGI prior to sale of stock A Gain/(loss) on sale of stock B AGI A+B a $30,000 37500 $67,500 212500-175000 b $30,000 ($16,400) $13,600 158600-175000 c $30,000 $33,000 $63,000 208000-175000 When FMV of the stock> Adjusted basis of donor then Donee basis is=Carryover basis+gift tax paid Adjusted basis=$154000+21000 175000 FMV $210,000 If any doubt please comment