Tobin inherited 100 acres of land on the death of his father in 2018. A Federal estate tax return was filed and the land was valued at $300,000 (its fair market value at the date of the death). The father had originally acquired the land in 1975 for $19,000 and prior to his death had made permanent improvements of $6,000. What is Tobin's basis in the land?
A) $19,000
B) $25,000
C) $300,000
D) $325,000
E) None of the above

Question

Quizplus · Accepted Answer

Tobin's basis in the land is the fair market value at the date of his father's death, which is $300,000. This is because inherited property receives a "step-up" in basis to its fair market value at the time of the decedent's death.

Tobin Inherited 100 Acres of Land on the Death of His