In Year 1, Iris King bought a diamond necklace for her own use at a cost of $10,000. In Year 6, when the fair market value was $12,000, Iris gave this necklace to her daughter, Ruth. No gift tax was due. Ruth’s holding period for this gift
Is irrelevant because Ruth received the necklace for no consideration of money or money’s worth.
Starts in Year 1.
Depends on whether the necklace is sold by Ruth at a gain or at a loss.
Starts in Year 6.