During the current year, Eleanor receives land valued at $30,000 from the estate of her grandfather. Her grandfather's basis in the land was $8,000. Eleanor sells the land for $34,000 late in the year. Eleanor's gross income is:

Question

Quizplus · Accepted Answer

Eleanor's gross income from the sale of the land is the difference between the selling price ($34,000) and the fair market value of the land when she inherited it ($30,000), which equals $4,000. The basis of inherited property is generally its fair market value at the time of the decedent's death, not the decedent's original basis.

During the Current Year, Eleanor Receives Land Valued at $30,000