Alice Is Terminally Ill and Does Not Expect to Live

question 50

Essay

Alice is terminally ill and does not expect to live much longer.Pondering the consequences of her estate, she decides how to allocate her property to her nieces.She makes a gift of depreciated property (i.e., adjusted basis exceeds fair market value) to Marsha, a gift of appreciated property (i.e., fair market value exceeds adjusted basis) to Jan, and leaves appreciated property to Cindy in her will.Each of the properties has the same fair market value.From an income tax perspective, which niece is her favorite?

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Definitions:

Systematically Search

A methodical and organized approach to search for information or solutions, often following a specific plan or pattern.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, often referred to as the "I-knew-it-all-along" phenomenon.

Availability

The ease with which a particular piece of information can be recalled from memory, often influenced by recent exposure or emotional impact.

Deductive Reasoning

A logical process where conclusions are drawn from a set of premises, starting with a general statement followed by specific instances.