In a Community Property State,jointly Owned Property Left to the Surviving

question 99

Multiple Choice

In a community property state,jointly owned property left to the surviving spouse will have a basis after the estate is settled equal to

• A)the decedent's basis before death.
• B)the total fair market value of the entire property at the date of death (if the alternative valuation date was not elected).
• C)half of the fair market value of the entire property at the date of death (if the alternative valuation date was not elected).
• D)half of the basis just before death,plus half of the fair market value at the date of death (if the alternative valuation date was not elected).

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Definitions:

Implicit Lease Rate

The interest rate embedded in a lease agreement that equates the value of lease payments to the fair value of the leased asset.

Incremental Borrowing Rate

The interest rate a lessee would have to pay if, instead of leasing, they financed the purchase of an asset with a loan over a similar term.

Implicit Rate Of Interest

The interest rate embedded in a lease agreement, used to calculate the present value of lease payments and to establish the lease classification.

Present Value

The current worth of a future sum of money or stream of cash flows, given a specified rate of return or discount rate.