[jgmart04]

Hello all, First time caller, long time listener. Need a quick explanation on gift tax.

I understand how a gain is calculated on a sale of property gifted to a donee Price sold for less donor’s basis.

Conversely, I understand a loss calculation price sold less the lower of donor’s basis(plus gift tax adj.) or the FMV at the date of the gift.

However, what I am struggling with is, what determines if the sale is a gain/loss?? Do you automatically assume the Donor’s basis and, as long as what I sell it for is greater than the FMV at the date of the gifting, that is your indication of a gain? If it is between the donor’s basis and FMV no gain/loss is recognized.

Just need a very “dumbed down” explanation of this to get through my thick skull

Stay classy San Diego

[Anonymous]

@jgmart04 when the sales price is greater than the donor basis and the FMV at the date of gift then there is gain.
when sell price is lowest of three then there is loss and when sales price in between of them then there is no gain and no loss.

[jgmart04]

That's what I was thinking but I just needed confirmation. Thanks for the response

[Author]

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