Robert and Diane,husband and wife,live in Pennsylvania,a common law state.They purchased land as joint tenants in 2010 for $300,000.In 2014,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?
A)$300,000
B)$375,00
C)$450,000
D)$750,000
E)None of these

Question

Quizplus · Accepted Answer

In a common law state, when one joint tenant dies, the surviving joint tenant receives a step-up in basis for the deceased's share. Diane's share is stepped up to the fair market value at her death ($225,000), and Robert's original basis for his share remains $150,000. Thus, Robert's adjusted basis is $375,000 ($150,000 + $225,000).

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