Doug receives a duplex as a gift from his uncle. The uncleâ€™s basis for the duplex and land is $90,000. At the time of the gift, the land and building have FMV of $40,000 and $80,000, respectively. No gift tax is paid by Dougâ€™s uncle at the time of the gift.
A. To determine gain, what is Dougâ€™s basis for the land?
B. To determine gain, what is Dougâ€™s basis for the building?
C. Will the basis of the land and building be the same as in Parts a and b for the purposes of determining loss?