If property is inherited by a taxpayer,
A)To the recipient, the basis for the property is the same as the basis to the decedent.
B)At sale date, the basis of the property to the recipient differs depending on whether the property was sold at a gain or a loss.
C)At sale date, the recipient will not have a gain or loss even if the recipient has held the property for more than a year.
D)In general, the basis to the recipient is the fair market value at the decedent's date of death.

Question

Quizplus · Accepted Answer

In general, the basis to the recipient of an inherited property is the fair market value of the property at the decedent's date of death. This is known as 'stepped-up basis'. The recipient's basis will be the new fair market value, rather than the original purchase price of the property.

If Property Is Inherited by a Taxpayer