OK, what was the PV of the home before Danny bought the remainder? AND how much with the life tenancy worth?
Obviously, if the home sold for $135,000 one week later, and if that price was an open market price, then that is the FMV of the home.
I do not know who gives the receipt for property in that state. I suspect the donor would have to have it appraised.
It's a federal thing, not a state thing. IRS Form 8283 indicates that the donor must get an appraisal if the donated property has a claimed value of more than $5000.
In our case, the gift of the $1,000,000 or so home, would be on our books for the 100,000 figure, we issue the receipt for that. It would be the same price we would sell the home to the 'tenant' for.
In this case, 3ABN had a book value on the house of over $50,000, and sold it to Danny for just $6,139. So the figures don't jive.
Correction...
- - Secondly, your example suggests that the conference would sell the $1 million home for $100,000 to the donor
I should have been $100,000 to the tenant, she/he was not the donor...
Sorry about that...
To my knowledge, May Chung never owned the property in question.
In your example, if neither the donor or the tenant had ever owned the property in question, can they be given a life estate in it?