Taylor Inherited 100 Acres of Land on the Death of His

question 88

Multiple Choice

Taylor inherited 100 acres of land on the death of his father in 2019.A Federal estate tax return was filed and this land was valued therein at $650,000, its fair market value at the date of the father's death.The father had originally acquired the land in 1973 for $112,000 and prior to his death, he had expended $20,000 on permanent improvements.Determine Taylor's holding period for the land.

• A)Will begin with the date his father acquired the property.
• B)Will automatically be long term.
• C)Will begin with the date of his father's death.
• D)Will begin with the date the property is distributed to him.

---

Definitions:

Average Variable Cost

The total variable cost of production divided by the quantity of output produced; it decreases and then increases as output increases due to economies and diseconomies of scale.

Economic Profit

The extra income a business makes after accounting for all costs and expenditures, including opportunity costs.

Profit-Maximizing Output

Profit-maximizing output is the quantity of production at which a firm achieves the highest possible profit, where marginal cost equals marginal revenue.

Total Variable Cost

The sum of all costs that vary with the level of output, such as materials and labor, distinct from fixed costs.