aughter, Tabitha. Tabitha sub alue of $200,000. How much
Chapter13: Property Transact Ions: Determination Of Gain Or Loss, Basis Considerations, And Nontaxable Exchanges
Section: Chapter Questions
Problem 7BCRQ
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Transcribed Image Text:Jacob has a parcel of vacant land that he had purchased as an investment. The land has an adjusted cost
base of $156,000 to Jacob. The fair market value of the land on January 1 of the current taxation year is
$167,500. On this date, Jacob gifts the property to his 14-year-old daughter, Tabitha. Tabitha subsequently
sells the land on December 1 of the current year for its fair market value of $200,000. How much gain will
each recognize on this series of transactions?
Choose the correct answer.
O A. Jacob, $32,500; Tabitha, $11,500
O B. Jacob, $44,000; Tabitha So
C. Jacob, $11,500; Tabitha, $32,500
O D. Jacob, $0; Tabitha, S44,000
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