In January 2008,Sid Makes a Gift of His Beach House

In January 2008,Sid makes a gift of his beach house (basis of $112,000; fair market value of $412,000) to his aunt.As a result of the transfer,Sid pays a gift tax of $20,000.The aunt dies in December 2008,when the property is worth $420,000.Under the terms of the aunt's will,the property passes to Sid.Sid's income tax basis in the beach house is:

A) $117,000.
B) $127,000.
C) $132,000.
D) $420,000.
E) None of the above.

Correct Answer:

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