When is the full market value of property considered in gross income?

The full market value of property is considered in gross income at the time the gift is made. This is significant because it aligns with the tax implications that arise when a gift is transferred from one individual to another. When a gift is given, the recipient may not include the value of the gift in their gross income, but the donor does need to consider it when looking at the potential gift tax implications.

Essentially, at the moment of the gift, the donor is responsible for any applicable gift taxes based on the value of the asset being transferred. Thus, assessing the full market value at this time is crucial for determining whether the gift exceeds annual exclusion limits and whether any gift tax liability is owed.

The other scenarios do not lead to an inclusion of market value in gross income in the context of gift taxation. The donor's death pertains to estate tax, which is evaluated based on the total value of the estate, not the individual gifts made during their lifetime. The sale of the property triggers a different event regarding capital gains and does not change the nature of its status as a gift. Lastly, the period after the property has been gifted primarily concerns the recipient's tax position, which is not relevant to the original question regarding gross income for the donor