Ask Question
Yesterday, 06:23

Parrot received land as a gift with a fair market value of $5,000. The land was purchased by the donor for $8,000. The land is sold for $6,000. What amount of gain should be reported?

Answers (1)
  1. A
    Yesterday, 09:26
    -1
    Loss of $2,000

    Explanation:

    In this scenario, we have the following information:

    • The adjusted cost basis: $8,000 (the amount paid by the donor)

    • The fair market value: $5,000

    • The sold amount: $6,000

    Parrot's basis in the land is $8,000, as same basis the donor had.

    So when he sells it, he must report loss of $2,000 on the sale.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Parrot received land as a gift with a fair market value of $5,000. The land was purchased by the donor for $8,000. The land is sold for ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
Sign In
Ask Question