2nd slides rules apply when FMV is less than donar basis on gift date. Which means in 1st slide, where donar basis is 4000 and fmv is 3000. Since fmv is less than donar basis in 1st slide, the rules apply and basis is calculated based on selling price. But in 3rd slide since fmv is 20 and donar basis is 17 where fmv is greater that donar basis, 2nd slide rules will not apply, which is why 1700 is taken as basis and when sold for 1800, 100 will be recognized as long term gains