REG Study Group October November 2013 - Page 78

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  • October 3, 2013 at 5:27 pm #480398
    Qlad
    Member

    @ insiyah…thanks a lot….



    @UCMCPA    …yay….lots of nights together….when r u giving REG

    FAR 72,71,81 🙂
    AUD 64,71, 72, 75 🙂 I'm done !!!
    REG 73, 74, 74, 84 🙂
    BEC 76 🙂

    October 3, 2013 at 5:28 pm #480373
    OCDisME
    Member

    I think there is some confusion on the GIFT basis and when the FMV is greater than the donor rollover cost basis and when the FMV is less than the rollover cost basis.

    I believe that Qlad and UCMCPA have the concept backwards. Please correct me if I'm wrong…

    “Property acquired as a gift generally retains the rollover cost basis as it had in the hands of the donor at the time of the gift….Gains and losses are calculated using this rollover cost basis (subject to the exception noted below).

    EXCEPTION: – LOWER FMV at Date of Gift

    “If the FMV at the date of the gift is LOWER than the rollover cost basis (NBV/adjusted basis) from the donor, the basis for the donee depends upon the donee's future selling price of the asset.”

    Becker Online - IL Candidate

    FAR: 85
    AUD: 85
    BEC: 78
    REG: 90

    October 3, 2013 at 5:28 pm #480400
    OCDisME
    Member

    I think there is some confusion on the GIFT basis and when the FMV is greater than the donor rollover cost basis and when the FMV is less than the rollover cost basis.

    I believe that Qlad and UCMCPA have the concept backwards. Please correct me if I'm wrong…

    “Property acquired as a gift generally retains the rollover cost basis as it had in the hands of the donor at the time of the gift….Gains and losses are calculated using this rollover cost basis (subject to the exception noted below).

    EXCEPTION: – LOWER FMV at Date of Gift

    “If the FMV at the date of the gift is LOWER than the rollover cost basis (NBV/adjusted basis) from the donor, the basis for the donee depends upon the donee's future selling price of the asset.”

    Becker Online - IL Candidate

    FAR: 85
    AUD: 85
    BEC: 78
    REG: 90

    October 3, 2013 at 5:35 pm #480375
    UCMCPA
    Member

    Yes, I wrote the whole thing out wrong and switched FMV and basis lol. Having a FMV > basis isn't exactly a bad situation. Doh!

    FAR - 84
    AUD - 94
    REG - 86
    BEC - 86

    October 3, 2013 at 5:35 pm #480402
    UCMCPA
    Member

    Yes, I wrote the whole thing out wrong and switched FMV and basis lol. Having a FMV > basis isn't exactly a bad situation. Doh!

    FAR - 84
    AUD - 94
    REG - 86
    BEC - 86

    October 3, 2013 at 5:43 pm #480377
    Kenada
    Member

    Found it … In the past posts this is what I have added to my notes :-

    Sell higher —-> Use donor's basis to determine gain

    Donor basis

    Sell between —-> no gain or loss

    Lower FMV at Date of gift

    Sell lower —-> use lower FMV at date of gift to determine loss

    Also write the below down in a table so that it makes it easier to compare.

    a). GIFT WHEN THE DONOR IS ALIVE

    NO GAIN Sales (Adjusted Basis)

    NO LOSS Sales (FMV)

    b). GIFT WHEN DONOR IS DEAD (BEQUEST)

    GAIN OR LOSS Sales (FMV)

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 5:43 pm #480404
    Kenada
    Member

    Found it … In the past posts this is what I have added to my notes :-

    Sell higher —-> Use donor's basis to determine gain

    Donor basis

    Sell between —-> no gain or loss

    Lower FMV at Date of gift

    Sell lower —-> use lower FMV at date of gift to determine loss

    Also write the below down in a table so that it makes it easier to compare.

    a). GIFT WHEN THE DONOR IS ALIVE

    NO GAIN Sales (Adjusted Basis)

    NO LOSS Sales (FMV)

    b). GIFT WHEN DONOR IS DEAD (BEQUEST)

    GAIN OR LOSS Sales (FMV)

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 5:47 pm #480379
    UCMCPA
    Member

    For some reason the whole

    a). GIFT WHEN THE DONOR IS ALIVE

    NO GAIN Sales (Adjusted Basis)

    NO LOSS Sales (FMV)

    b). GIFT WHEN DONOR IS DEAD (BEQUEST)

    GAIN OR LOSS Sales (FMV)

    is racking my brain. Not sure I comprehend what all of this is saying.

    FAR - 84
    AUD - 94
    REG - 86
    BEC - 86

    October 3, 2013 at 5:47 pm #480406
    UCMCPA
    Member

    For some reason the whole

    a). GIFT WHEN THE DONOR IS ALIVE

    NO GAIN Sales (Adjusted Basis)

    NO LOSS Sales (FMV)

    b). GIFT WHEN DONOR IS DEAD (BEQUEST)

    GAIN OR LOSS Sales (FMV)

    is racking my brain. Not sure I comprehend what all of this is saying.

    FAR - 84
    AUD - 94
    REG - 86
    BEC - 86

    October 3, 2013 at 5:59 pm #480381
    Kenada
    Member

    I think this is better and works from me better. Think it was Skrier that posted this up somewhere in page 8 or so

    Sell higher —-> Use donor's basis to determine gain

    Donor basis

    Sell between —-> no gain or loss

    Lower FMV at Date of gift

    Sell lower —-> use lower FMV at date of gift to determine loss

    The whole Idea is the IRS wants to maximize your gain and minimize your losses…

    I always keep these words in mind.. “IRS wants to squeeze every cent out of you”

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 5:59 pm #480408
    Kenada
    Member

    I think this is better and works from me better. Think it was Skrier that posted this up somewhere in page 8 or so

    Sell higher —-> Use donor's basis to determine gain

    Donor basis

    Sell between —-> no gain or loss

    Lower FMV at Date of gift

    Sell lower —-> use lower FMV at date of gift to determine loss

    The whole Idea is the IRS wants to maximize your gain and minimize your losses…

    I always keep these words in mind.. “IRS wants to squeeze every cent out of you”

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 6:07 pm #480383
    Kenada
    Member

    I found this online too that should help :-

    Property – Received as a Gift

    To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it.

    FMV Less Than

    Donor's Adjusted Basis

    If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis, earlier).

    If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property.

    FMV Equal to or More Than

    Donor's Adjusted Basis

    If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift.

    Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property.

    Business property. If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property.

    https://www.irs.gov/publications/p551/ar02.html#en_US_2010_publink1000256908

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 6:07 pm #480410
    Kenada
    Member

    I found this online too that should help :-

    Property – Received as a Gift

    To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it.

    FMV Less Than

    Donor's Adjusted Basis

    If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property (see Adjusted Basis, earlier).

    If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property.

    FMV Equal to or More Than

    Donor's Adjusted Basis

    If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift.

    Also, for figuring gain or loss from a sale or other disposition of the property, or for figuring depreciation, depletion, or amortization deductions on business property, you must increase or decrease your basis by any required adjustments to basis while you held the property.

    Business property. If you hold the gift as business property, your basis for figuring any depreciation, depletion, or amortization deduction is the same as the donor's adjusted basis plus or minus any required adjustments to basis while you hold the property.

    https://www.irs.gov/publications/p551/ar02.html#en_US_2010_publink1000256908

    FAR 05/27/14; 786/110 - Done !

    October 3, 2013 at 6:08 pm #480385
    Qlad
    Member

    don't do this to me guys….when ever i feel i got it…don't put me thru a roller coaster again….lol

    let me try it again….

    D.BASIS 200, FMV 400, SALE 300 …then txble GAIN is 100

    EXCEPTION : if D.BASIS 200 , FMV 150 then depends on sale…right???

    FAR 72,71,81 🙂
    AUD 64,71, 72, 75 🙂 I'm done !!!
    REG 73, 74, 74, 84 🙂
    BEC 76 🙂

    October 3, 2013 at 6:08 pm #480412
    Qlad
    Member

    don't do this to me guys….when ever i feel i got it…don't put me thru a roller coaster again….lol

    let me try it again….

    D.BASIS 200, FMV 400, SALE 300 …then txble GAIN is 100

    EXCEPTION : if D.BASIS 200 , FMV 150 then depends on sale…right???

    FAR 72,71,81 🙂
    AUD 64,71, 72, 75 🙂 I'm done !!!
    REG 73, 74, 74, 84 🙂
    BEC 76 🙂

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