Billy and Sue Are Married and Live in Texas,a Community

question 20

Multiple Choice

Billy and Sue are married and live in Texas,a community property state.They jointly own real property with an adjusted basis of $200,000.When the property has a FMV of $450,000,Billy dies leaving all of the property to Sue.If she later sells the property for $650,000,what is Sue's gain on the sale?

• A)$200,000
• B)$225,000
• C)$325,000
• D)$450,000

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Definitions:

Return on Assets

A financial ratio that indicates how profitable a company is relative to its total assets.

Internal Growth Rate

The maximum rate at which a company can expand using only internal financing without resorting to borrowing or selling equity.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders as dividends, represented as a percentage of its net income.

Financial Statement

Formal records of the financial activities and position of a business, person, or other entity, typically including balance sheet, income statement, and cash flow statement.