Bart is the favorite nephew of his aunt Thelma. Thelma transferred several items of value to Bart.

Question:

Bart is the favorite nephew of his aunt Thelma. Thelma transferred several items of value to Bart. For each of the following transactions, determine the effect on Bart's gross income:
a. Thelma gave Bart an auto worth $22,000. Thelma purchased the auto three years ago for $17,000.
b. Thelma elects to cancel her life insurance policy, and she gives the cash surrender value of $15,000 to Bart.
c. Bart is the beneficiary of a $100,000 whole life insurance policy on the life of Thelma. Thelma died this year, and Bart received $100,000 in cash.
d. Bart inherited 500 shares of stock from Thelma's estate. Thelma purchased the shares many years ago for $1,200 and the shares are worth $45,000 at her death.
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Taxation Of Individuals And Business Entities 2015

ISBN: 9780077862367

6th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Question Posted: