Gift Basis vs FMV Calculator

Gifted property uses the donor's carryover basis — there's no step-up at gift like there is at death. If the property has appreciated, the donee inherits all the embedded gain. If the property has depreciated, the dual basis rule applies: use donor's basis for gain calcs and FMV at gift for loss calcs. This calculator works through both scenarios.

Donor's adjusted basis

FMV at date of gift

Donor's holding period (years)

Sale proceeds (if sold)

Basis to use for gain/loss

$180,000

Recognized gain or loss

$520,000

Tax treatment rule

Gain — use donor's basis (higher gain)

How the math works

Gift basis: takes the donor's adjusted basis (carryover) — no step-up like inheritance. If the property has lost value at the time of gift, the dual basis rule applies: use donor's basis for gain calculations and FMV for loss calculations.

Gift tax-wise: donor uses lifetime exclusion ($13.61M in 2024). Annual exclusion $18K/donor/donee/year doesn't trigger gift tax. Recipient's holding period tacks on — donor's holding period continues for capital gain treatment.

How to Use

Enter donor's adjusted basis and FMV at date of gift.
Enter donor's holding period.
Enter sale proceeds (if/when sold).
Read which basis applies and the resulting gain or loss.

Frequently Asked Questions

Why is gift basis carryover?

Tax law treats gifts as transfers without recognition — donor pays gift tax (using lifetime exclusion); donee takes carryover basis to preserve the embedded gain.

Holding period?

Donee tacks donor's holding period — long-term capital gain treatment applies even if donee sells within a year of receiving the gift, as long as donor held it long-term.