Taxation of Securities Received as a Gift

What this video covers

• How to tell an appreciated gift from a depreciated gift, and why that single distinction controls every other calculation
• Carryover basis for appreciated gifts: the donee takes the donor's original cost basis and the donor's holding period tacks on
• Why fair market value (FMV) on the date of the gift is a phantom number for appreciated gifts, and a classic distractor answer choice
• The dual basis rule for depreciated gifts: donor's basis as the ceiling, FMV at gift as the floor, and how the sale price picks which one applies
• The "no man's land" between the floor and the ceiling, where the correct answer is always no gain or loss recognized
• How the holding period tacks on for a gain but starts fresh on the gift date for a loss under the dual basis rule
• The gift tax paid adjustment: increases basis only for appreciated gifts based on net appreciation, never for depreciated gifts