Anike received property as part of an inheritance from her father who passed away on March 10,2014.The property was purchased by her father on July 3,2013,for $146,000.Anike sold the property on June 30,2014,for $158,000.At the date of his death the property had a FMV of $144,000.What gain,if any,will Anike pick up on her return for 2014?

Question

Quizplus · Accepted Answer

Anike acquired the property through inheritance, so the property's basis is "stepped-up" to its fair market value (FMV) on the date of her father's death, which was $144,000. Since she sold the property for $158,000, the recognized gain will be the difference between the FMV at the date of death and the selling price ($158,000 - $144,000 = $14,000). Since Anike inherited the property and held it for more than one year before selling it, the gain will be classified as a long-term capital gain. Therefore, the correct answer is D, $14,000 long-term gain.

Anike Received Property as Part of an Inheritance from Her