Anike received property as part of an inheritance from her father who passed away on March 10,2017.Her father purchased the property on July 3,2016,for $156,000.Anike sold the property on June 30,2017,for $168,000.At the date of his death the property had a FMV of $154,000.What gain,if any,will Anike pick up on her return for 2017?
A)no gain is recognized on the sale of property sold within 1 year of inheritance.
B)$3,000 long-term gain.
C)$14,000 short-term gain.
D)$14,000 long-term gain.

Question

Quizplus · Accepted Answer

Anike's basis in the inherited property is its fair market value at the date of her father's death, which is $154,000. Since Anike sold the property on June 30, 2017, which is less than one year after the date of inheritance, the gain is classified as short-term. Anike's realized gain is $168,000 - $154,000 = $14,000. Therefore, Anike will have a $14,000 long-term gain to report on her tax return for 2017.

Anike Received Property as Part of an Inheritance from Her