Ludwig died on April 5,2017.As part of his will,he leaves land for which he paid $6,000 on December 31,2016,to his son Don.On April 5,2017,the land is worth $11,000.However,due to local real estate conditions,the land declines in value.On July 28 it is worth only $10,000;it declines further to $9,000 on October 5 and plunges to $7,000 on December 18.
I.In the absence of any special elections,Don's basis in the land is $11,000.
II.If the executor elects the alternate valuation date and distributes the land to Don on July 28,Don's basis in the land will be $9,000.
III.If the executor elects the alternate valuation date and distributes the land to Don on December 18,Don's basis will be $7,000.
IV.In the absence of any special elections,if the executor distributes the land to Don on October 5,Don's basis in the land will be $9,000.

Question

Ludwig died on April 5,2017.As part of his will,he leaves land for which he paid $6,000 on December 31,2016,to his son Don.On April 5,2017,the land is worth $11,000.However,due to local real estate conditions,the land declines in value.On July 28 it is worth only $10,000;it declines further to $9,000 on October 5 and plunges to $7,000 on December 18.
I.In the absence of any special elections,Don's basis in the land is $11,000.
II.If the executor elects the alternate valuation date and distributes the land to Don on July 28,Don's basis in the land will be $9,000.
III.If the executor elects the alternate valuation date and distributes the land to Don on December 18,Don's basis will be $7,000.
IV.In the absence of any special elections,if the executor distributes the land to Don on October 5,Don's basis in the land will be $9,000.
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Quizplus · Accepted Answer

Statement I is correct because Don's basis in the land is the fair market value at the time of Ludwig's death, which was $11,000. 
Statements II, III, and IV are incorrect because they assume the alternate valuation date was chosen. However, the question does not specify that this election was made. Therefore, Statement I is the only correct statement.

Ludwig Died on April 5,2017