@VTCATS wrote:
.......Writing, "JUST BEFORE" is super misleading. They could have simply said you take the donors adjusted basis...PERIOD.
Agreed, but then the verbiage is from the instructions and/or other IRS publications and materials (which have not only been misleading on occasions but just plain wrong on a few).
The Code is actually much clearer on this issue.
See https://www.law.cornell.edu/uscode/text/26/1015
(a) Gifts after December 31, 1920
If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift, except that if such basis (adjusted for the period before the date of the gift as provided in section 1016) is greater than the fair market value of the property at the time of the gift, then for the purpose of determining loss the basis shall be such fair market value.
