@Mama Just posted this on another thread related to Gift Basis:
There are different rules depending on whether FMV is higher or lower than the donor's basis. If you have Becker, look at pg. R4-11. If the FMV is HIGHER than the Donor's basis, then you automatically use the donor's basis to determine the gain.
However, if the FMV is LOWER than the Donor's basis, then it depends on the selling price:
If SP > Donor's basis, use Donor's basis to determine gain.
If SP < FMV, use FMV to determine loss.
If SP is in between Donor's basis and FMV, then no gain or loss.
BEC: 73, 81
AUD: 85
FAR: 71, 77
REG: 74, 75...finally DONE! 😀
*This is my 2nd attempt at the CPA exam. For all of you who have failed this exam many times, given up on it, or taken a break like me, remember that it is still possible to finish what you started...failure is the opportunity to begin again more intelligently 🙂