Tobin Inherited 100 Acres of Land on the Death of His

question 22

Multiple Choice

Tobin inherited 100 acres of land on the death of his father in 2019.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 1976 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

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Definitions:

Compute

To calculate or process by means of a computer or mathematical operations.

Held To Maturity

A classification for debt securities which an investor intends and is able to hold until maturity, recognizing interest income over the term.

Face Value

The nominal or dollar value printed on a security or instrument, such as a bond or stock, representing its legal value.

Interest

The cost of borrowing money, typically expressed as an annual percentage of the loan or deposit amount.