Monte inherited 1,000 shares of Corporation Zero stock from his father who died on March 4 of the current year.His father paid $30 per share for the stock on September 2,2005.The FMV of the stock on the date of death was $50 per share.On September 4 this year,the FMV of the stock was $55 per share.The executor did not elect the alternate valuation date.Monte sold the stock for $65 per share on December 3.What is the amount and nature of any gain or loss?

Question

Quizplus · Accepted Answer

Monte's basis in the stock is the FMV at the date of death, which is $50 per share. Since he sold the stock for $65 per share, he has a long-term capital gain (LTCG) of $15 per share. Multiplying this by the number of shares (1,000) gives a total LTCG of $15,000. Since Monte held the stock for more than one year before selling, the gain is considered to be long-term.

Monte Inherited 1,000 Shares of Corporation Zero Stock from His