Robert and Diane,husband and wife,live in Pennsylvania,a common law state.They purchased land as joint tenants in 2011 for $300,000.In 2015,Diane dies and bequeaths her share of the land to Robert.The land has a fair market value of $450,000.What is Robert's adjusted basis for the land?

Question

Quizplus · Accepted Answer

When a joint tenant dies, the surviving joint tenant receives a step-up in basis for the portion of the property that they inherit. In this case, Diane's share of the land is bequeathed to Robert, meaning that he receives a step-up in basis for her share. Robert's adjusted basis for the land is therefore equal to the original purchase price of $300,000 plus half of the fair market value of the property at the time of Diane's death, or $225,000. This gives a total adjusted basis for Robert of $375,000.

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