Ludwig Died on April 5,2013

question 83

Multiple Choice

Ludwig died on April 5,2013.As part of his will,he leaves land for which he paid $6,000 on December 31,2012,to his son Don.On April 5,2013,the land is worth $11,000.However,due to local real estate conditions,the land declines in value.On July 28 it is worth only $10,000; it declines further to $9,000 on October 5 and plunges to $7,000 on December 18.
I.In the absence of any special elections,Don's basis in the land is $11,000.
II.If the executor elects the alternate valuation date and distributes the land to Don on July 28,Don's basis in the land will be $9,000.
III.If the executor elects the alternate valuation date and distributes the land to Don on December 18,Don's basis will be $7,000.
IV.In the absence of any special elections,if the executor distributes the land to Don on October 5,Don's basis in the land will be $9,000.

• A)Only I is correct.
• B)I and II are correct.
• C)I, II and IV are correct.
• D)I and IV are correct.
• E)All the statements are correct.

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Definitions:

Negatively Skewed Distribution

A distribution shape where the tail is on the left side, indicating that the bulk of values are concentrated on the right.

Mode

The number that occurs the greatest number of times in a series of data.

Median

The middle value in a data set when the values are arranged in order, or average of the two middle values when there is an even number of observations.

Mean

The average value of a set of numbers, calculated by adding all the numbers together and dividing by the count of the numbers.