Tony Died on April 5,2013

question 67

Multiple Choice

Tony died on April 5,2013.As part of his will,he leaves land that he paid $6,000 for in 1993 to his son Philip.On April 5,2013,the land is worth $11,000.However,due to local real estate conditions,the land continues to decline 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,Philip's basis in the land is $6,000.
II.If the executor distributes the land to Philip on July 28,Philip's basis in the land will be $10,000.

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Beta

An indicator of how much a stock's price fluctuates compared to the general market, representing its relative risk.

Risk-Free Rate

The expected yield on an investment that is considered completely risk-free, often linked to government securities.

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The additional return expected by investors for taking on the risk of investing in the stock market over a risk-free investment.