DeMarcus and Brianna are married and live in a common law state.They jointly own real property with an adjusted basis of $200,000.When the property has a FMV of $450,000,DeMarcus dies leaving all of the property to Brianna.If she later sells the property for $650,000,what is Brianna's gain on the sale?

Question

Quizplus · Accepted Answer

Since the property was jointly owned, DeMarcus's half of the adjusted basis is stepped up to FMV at his death, which is $100,000. Therefore, Brianna's new adjusted basis in the property is $300,000 ($200,000 + $100,000). When she sells the property for $650,000, her gain is $350,000 ($650,000 - $300,000).

DeMarcus and Brianna Are Married and Live in a Common