Sally Robbins gifted depreciable business equipment to her brother, Johr. respec

Question

Sally Robbins gifted depreciable business equipment to her brother, Johr. respect to that gift is NOT correct? O Sally reports the gift on Form 709 at its current fair market value. O John's basis in the property is the same as Sally's adjusted basis at the time of the gift o John must report any gain on his sale of the equipment as Section 1245 recapture (ordinary income r. John. Which of the following statoments ww depreciation claimed by Sally, whether or not he uses the property for business purposes Sally must report gain on her Form 1040 equal to the difference between the value and adjusted basis of property for buisirese (ordinary ncome) to the extent af the the property. or 0 the total depreciation she claimed, whichever is less.

Explanation / Answer

Since Sally will be paying gift tax and filling gift tax return in form 709, sally is not required to file any gain in Form 1040. Thus answer is Option D, The sally must report gain on her form 1040 equal to the difference between the value and adjusted basis of the property, or the total depreciation she claimed, whichever is less." is not correct

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