Tobin Inherited 100 Acres of Land on the Death of His

question 155

Multiple Choice

Tobin inherited 100 acres of land on the death of his father in 2014. A Federal estate tax return was filed and the land was valued at $300,000 (its fair market value at the date of the death) . The father had originally acquired the land in 1971 for $19,000 and prior to his death had made permanent improvements of $6,000. What is Tobin's basis in the land?

• A) $19,000.
• B) $25,000.
• C) $300,000.
• D) $325,000.
• E) None of the above.

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Definitions:

Cash Payments

Outflows of cash from a company to settle debts, purchase goods or services, or make investments.

Cash Account

An account recording the amounts of cash received and paid out in transactions.

Credit

A financial term denoting the provision of money, goods, or services with the expectation of future payment.

Consuming Goods

The action of using up goods or products, thereby reducing inventory.