Tywin Lannister is the sole owner of his family's homeplace, Casterly Rock, comprised of 21 acres. His county tax bill shows that Casterly Rock is appraised at $200,000 (based on a county appraisal now several years old).

One day, angry at his two sons, Tywin gift deeds Casterly Rock to his daughter, Cersei.

When Tywin inherited Casterly Rock, the parcel was appraised at $100,000. Just prior to his gift to Cersei, he secures a current appraisal for the property revealing a value of $300,000.

At tax time in the year following the gift to Cersei, Tywin properly files a Form 709 with the Internal Revenue Service.

What is Cersei's basis in Casterly Rock?

Select one:

a.

$100,000

b.

$300,000

c.

$200,000

Upon receiving her gift, Cersei decides to sell Casterly Rock to Prince Oberin of Dorn for $400,000.

What is her capital gain tax on the sale, assuming a capital gain tax rate of 15%?

Select one:

a.

($400,000 - $100,000) x .15 = $45,000

b.

($400,000 - $300,000) x .15 = $15,000

c.

($400,000 - $200,000) x .15 = $30,000