Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:
A. The widower recognized no capital gain for income tax purposes at the time the gift was made.
B. The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift.
C. The son's income tax basis in the real estate is $1,000,000.
D. The gift tax paid is brought back into the widower's gross estate at $159,500.
Answer:C
Assuming the widower made no additional gifts to his son, all the following statements concerning this situation are correct EXCEPT:
A. The widower recognized no capital gain for income tax purposes at the time the gift was made. B. The gift of the real estate is included in the calculation of the widower's federal estate tax as an adjusted taxable gift. C. The son's income tax basis in the real estate is $1,000,000. D. The gift tax paid is brought back into the widower's gross estate at $159,500.