Which of the following results from selling a gift for less than its fair market value?

When a donor sells an asset for less than its fair market value, a partial gift occurs, which means that the difference between the sale price and the fair market value is considered a gift. In this scenario, the donor is effectively giving away a portion of the asset's value to the recipient because the recipient benefits from receiving something worth more than what they paid for it.

This partial gift is significant for gift tax purposes. Depending on the amount, it could result in a taxable gift if it exceeds the annual exclusion limit. However, the key concept here is the recognition of the transaction as a gift, even if the donor intended to simply sell the asset.

In contrast, simply selling a gift at its fair market value does not create any taxable gift, and the original owner would not maintain ownership over the asset once sold unless there were specific terms in the sale agreement allowing for such. Therefore, the implication of partial gifting emphasizes the importance of understanding the financial impact and potential tax liabilities involved in transactions that involve selling assets below their market value.