Geraldine inherited a piece of land when her father Albert died on July 26,2013.The FMV of the land at the date of death was $40,000 and cost Albert $20,000 in 2007.Geraldine sold the land on March 29,2014 for $45,000.What are the amount and nature of the gain on the sale?

Question

Quizplus · Accepted Answer

Geraldine's basis in the inherited land is the fair market value at the date of Albert's death, which is $40,000. She sold it for $45,000, resulting in a $5,000 gain. Since the land is a capital asset, the gain is a capital gain.

Geraldine Inherited a Piece of Land When Her Father Albert