Margaret died on September 16, 2018, when she owned securities with a basis of $50,000 and a FMV of $60,000. Caroline inherited the property and sold it on December 19, 2018 for $67,000. What is Caroline's reported gain on this sale?

Question

Quizplus · Accepted Answer

Caroline's basis in the inherited property is the FMV at the date of Margaret's death, which is $60,000. She sold it for $67,000, resulting in a gain of $7,000. Since inherited property is considered long-term, the gain is a long-term capital gain (LTCG).

Margaret Died on September 16, 2018, When She Owned Securities