Kelly Inherits Land Which Had a Basis to the Decedent

question 62

Multiple Choice

Kelly inherits land which had a basis to the decedent of $95,000 and a fair market value of $50,000 on August 4,2016,the date of the decedent's death.The executor distributes the land to Kelly on November 12,2016,at which time the fair market value is $49,000.The fair market value on February 4,2017,is $45,000.In filing the estate tax return,the executor elects the alternate valuation date.Kelly sells the land on June 10,2017,for $48,000.What is her recognized gain or loss?

• A)($1,000)
• B)($2,000)
• C)($47,000)
• D)$1,000
• E)None of the above

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Definitions:

Noncurrent Assets

Long-term investments or properties that a company doesn't expect to convert into cash within one year.

Contractual Agreements

Contractual agreements are legally binding arrangements between two or more parties outlining the terms, conditions, and obligations of each.

Financial Statement Disclosure

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Gross Profit Percentage

A financial metric expressing gross profit as a percentage of total sales.