Mommy Hilton owns a mansion in Florida, which she purchased for $1,600,000 on Ju

Question

Mommy Hilton owns a mansion in Florida, which she purchased for $1,600,000 on June 1, 1998. On June 2, 2012, Mommy gifts the house to her daughter, Pairus. Mommy pays $120,000 in gift tax on the transfer based on the mansion's $1,200,000 fair market value on the date of the gift (already net of the $13,000 exclusion). What is Pairus's gain or loss in the mansion if she sells it for $1,320,000 on June 3, 2009?
Answer
Question 1 answers

(a) ($480,000)

(b) ($280,000)

(c) ($240,000)

(d) $0

(e) None of the above

Explanation / Answer

(c) ($240,000)

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