Rita died on January 1, 2018 owning an asset with a FMV of $730,000 that she purchased in 2010 for $600,000. Bert inherited the asset from Rita. When Bert sells the asset for $800,000 on August 20, 2018, he must recognize a

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The asset was held for more than one year by both Rita and Bert, so the gain is long-term. The gain is $800,000 - $600,000 = $200,000. However, Rita's basis in the asset is stepped up to $730,000 at her death, so Bert's basis is also $730,000. Therefore, Bert's gain is $800,000 - $730,000 = $70,000.

Rita Died on January 1, 2018 Owning an Asset with a FMV