- 14 -
to 3:00 p.m. * * * at various places including * * * a girl
friend's apartment and hotels where [he] was staying." He paid
her living expenses, plus $200 a week, and he provided her with
money for other things, such as investing, decorating her
apartment, and buying a car. We held that none of the more than
$100,000 that he gave her over the 5 years was taxable to her.
We concluded that she received the money as a gift. We reached
this conclusion notwithstanding the fact that the woman had
stated that she "earned every penny" of the money.
Given our conclusion in this case that petitioner received
her interest in the property as gifts from Mr. Kent, her basis in
the property equals Mr. Kent's basis immediately before the
gifts, to the extent that his basis is attributable to the gifted
property.9 Sec. 1015(a). Although the record does not indicate
with mathematical specificity the amount of Mr. Kent's basis that
passed to petitioner as a result of the gifts, we are satisfied
from the facts at hand that her basis equaled or exceeded the
amount that she realized on the sale; i.e., $153,500.10 We
conclude that petitioner had no gain to recognize upon receipt of
the disputed payment.
9If petitioner were claiming (which she is not) that she had
realized a loss on her disposition of any of the gifted property,
her basis in that property would equal the lesser of Mr. Kent's
basis at the time of the gift or the property's fair market value
at that time. Sec. 1015(a).
10In fact, we do not think it unreasonable to conclude that
petitioner's basis in the house and boat equaled or exceeded
$153,500.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011