Mary Inherits an Interest in Laser Partnership from Her Aunt

question 38

Multiple Choice

Mary inherits an interest in Laser Partnership from her Aunt Lillian during 2013.The fair market value of the interest as of the primary valuation date is $28,000.Aunt Lillian's adjusted basis was $16,000.What is Mary's initial basis and holding period in the partnership interest if she sells the interest seven months after inheriting it?

• A)$16,000, short-term.
• B)$16,000, long-term.
• C)$28,000, short-term.
• D)$28,000, long-term.
• E)Both depend on whether it is sold at a gain or a loss.