Robert and Diane,husband and wife,live in Pennsylvania,a common law state.They purchased land as joint tenants in 2006 for $60,000.In 2010,Diane dies and bequeaths her share of the land to Robert.The land has a fair market value of $88,000.What is Robert's adjusted basis for the land?
A)$88,000.
B)$74,000.
C)$60,000.
D)$30,000.
E)None of the above.

Question

Quizplus · Accepted Answer

As joint tenants, the basis of the half of the land that Robert inherited from Diane is adjusted to its fair market value at the time of her death, which is $44,000 (half of $88,000). Thus, Robert's adjusted basis in the land is the sum of his original basis ($30,000, half of the purchase price) and the basis of the half he inherited from Diane ($44,000), or $74,000.

Robert and Diane,husband and Wife,live in Pennsylvania,a Common Law State