Margaret died on September 16,2016,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 19,2016 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. The gain is the selling price ($67,000) minus the basis ($60,000), resulting in a $7,000 gain. Since inherited property is considered long-term, the gain is a long-term capital gain (LTCG).

Margaret Died on September 16,2016,when She Owned Securities with a Basis