Accounting Problem: Don’s aunt Natalie gave him a house
During the current year, Don’s aunt Natalie gave him a
house. At the time of the gift, the house had a FMV of $42,000 and his aunt’s
adjusted basis was $32,000. After deducting the annual exclusion, the amount of
the gift was $30,000. His aunt paid a gift tax of $9,000 on the house. What is
Don’s basis in the house for purposes of determining gain?
Tom purchased a machine for use in his trade or business
several years ago for $25,000. During the current year, Tom donates the machine
to the local community college. At the time of the contribution, the machine’s
adjusted basis is $10,000 and its FMV is $15,000. Tom’s AGI for the year is
$28,000. What is the amount of his charitable contribution deduction?