Ed Gives Steve Land with an Adjusted Basis of $40,000

question 31

Multiple Choice

Ed gives Steve land with an adjusted basis of $40,000 and an FMV of $90,000. Ed paid no gift tax. Ed then inherits the same land back from Steve at Steve's death eight months later. At Steve's death, the land is worth $120,000. Ed's basis in the land becomes

• A) $40,000.
• B) $120,000.
• C) $90,000.
• D) cannot be determined from the facts given

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Definitions:

Limited Partnership

A partnership structure with one or more general partners who manage the business and assume legal debts and obligations, and one or more limited partners who are liable only up to the amount of their investment.

Limited Liability Partnership

A business structure that allows partners to have limited personal liability for the debts and actions of the partnership.

Business Organization

The structure of a company or entity, including its formation, operations, and management, and the relationships among its various stakeholders.

Manager-Managed LLC

A limited liability company in which the management is specifically designated to one or more managers, rather than being managed by all members.