Kelly Inherits Land Which Had a Basis to the Decedent

question 272

Multiple Choice

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 the above.

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Definitions:

Continuous Uniform

A distribution that assigns an equal probability to all outcomes in a continuous range.

Random Variable

A variable whose possible values are outcomes of a statistical experiment, where the value is determined by chance.

Probability Density Function

A function that describes the relative likelihood for a continuous random variable to take on a given value.

Uniform Distribution

Describes a situation in which all outcomes are equally likely, such as the roll of a fair die.