bargain sale and donations

Technical topics regarding tax preparation.
#1
flimbar  
Posts:
11
Joined:
21-Apr-2017 8:12am
Location:
Texas
My understanding of this is that capital gains or ordinary income will be due even if the property is sold at basis.

So land inherited at 100 and sold for 220 with fair market of 250.

Sales price * Original Basis / FMV = Adjusted basis for gain
220 * 100/250 = 88

88 is the new basis in the property. 220 - 88 = 132 gain on the sale plus a 30 donation.

Property sold at basis with donation

100 * 100 / 250 = 40

40 is new basis in property. 100 - 40 = 60 gain and 150 donation

Donation requires professional appraisal for FMV. AGI limits apply.

Reg. 1.1011-2 :ugeek:
 

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