Question

Ashely inherited all of the property of her aunt, who died in 2016. Her aunt's adjusted basis for the property at the date of death was $1,200,000. The property's fair market value was $4,500,000 at the date of death and $4,800,000 six months after the date of death. What is Ashely's adjusted basis of the property for income tax purposes?

Answer 1

Ashely's adjusted basis of the inherited property for income tax purposes would be the fair market value at the date of the aunt's death, which is $4,500,000.

Step-by-step explanation:

Ashely's adjusted basis of the property for income tax purposes is typically the fair market value of the property at the date of the decedent's death. Since the aunt died in 2016 and her adjusted basis for the property at the date of death was $1,200,000, while the property's fair market value was $4,500,000,

aAshely's basis would generally be stepped up to the fair market value. Therefore, Ashely's adjusted basis for the property would be $4,500,000.