If Property Is Inherited by a Taxpayer

question 26

Multiple Choice

If property is inherited by a taxpayer,

• A)To the recipient, the basis for the property is the same as the basis to the decedent.
• B)At sale date, the basis of the property to the recipient differs depending on whether the property was sold at a gain or a loss.
• C)At sale date, the recipient will not have a gain or loss even if the recipient has held the property for more than a year.
• D)In general, the basis to the recipient is the fair market value at the decedent's date of death.

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Definitions:

Par Value

A nominal or face value assigned to a share of stock or a bond by the issuer.

Interest Rate

This is the charge, applied as a percentage of the principal sum, that a lender requires from a borrower for using its assets.

Coupon Rate

A bond's annual return rate, expressed as a portion of its nominal value.

Comparable Bonds

Bonds that are similar in terms of interest rate, maturity, and credit quality, used as a benchmark to evaluate the value of other bonds.