Joe$$s friend John purchased an automobile for $$60,000$ from a dealer for his

personal use and has not taken tax depreciation on that automobile. Two years

later, John gives the automobile to Joe and did not pay gift tax on the gift. At the

time of the gift, the fair market value of the automobile is $$40,000.$

a$.$ What is Joe$$s basis in the automobile that Joe would use if he were to sell

the automobile at a gain?

b$.$ What section of the Internal Revenue Code supports your answer in a$?$

c$.$ Joe decides to sell the automobile. What happens in each of the following

situations:

i$.$ What gain or loss does Joe recognize if he sells the automobile

for $$30,000$ to an unrelated party? Please provide BOTH the gain

or loss and the section$($s$)$ of the Internal Revenue Code that

support$($s$)$ your answer.

ii$.$ What gain or loss does Joe recognize if he sells the automobile

for $$65,000$ to an unrelated party? Please provide BOTH the gain

or loss and the section$($s$)$ of the Internal Revenue Code that

support$($s$)$ your answer.