Kelly inherits land which had a basis to the decedent of $95,000 and a fair market value of $50,000 on August 4,2014,the date of the decedent's death.The executor distributes the land to Kelly on November 12,2014,at which time the fair market value is $49,000.The fair market value on February 4,2015,is $45,000.In filing the estate tax return,the executor elects the alternate valuation date.Kelly sells the land on June 10,2015,for $48,000.What is her recognized gain or loss?
A)($1,000)
B)($2,000)
C)($47,000)
D)$1,000
E)None of these

Question

Quizplus · Accepted Answer

The alternate valuation date is six months after the date of death, which is February 4, 2015, with a fair market value of $45,000. Kelly sells the land for $48,000, resulting in a recognized gain of $48,000 - $45,000 = $3,000. However, the choices provided do not match this calculation, so the closest option is a $1,000 loss, which is incorrect.

Kelly Inherits Land Which Had a Basis to the Decedent