ExpertMedium1 markMultiple Choice
CPA · Question 64 · Area 5: Property Transactions
Decedent died on Jan 1. Estate elects Alternate Valuation Date (AVD). Asset A: Date of Death (DOD) Value 0k, 6-month Value 0k. Asset B: DOD Value 0k, Sold 3 months later for 0k. What is the basis of these assets in the hands of the heir?
Decedent died on Jan 1. Estate elects Alternate Valuation Date (AVD). Asset A: Date of Death (DOD) Value 0k, 6-month Value 0k. Asset B: DOD Value 0k, Sold 3 months later for 0k. What is the basis of these assets in the hands of the heir?
Answer options:
A.
Asset A: 0,000; Asset B: 0,000
B.
Asset A: 0,000; Asset B: 0,000
C.
Asset A: 0,000; Asset B: 0,000
D.
Asset A: 0,000; Asset B: 0,000
How to approach this question
AVD = 6 months after death. If sold early -> Date of Sale. Basis = Estate Value.
Full Answer
B.Asset A: 0,000; Asset B: 0,000✓ Correct
Under AVD, assets are valued at the date 6 months after death, unless sold/distributed earlier, in which case they are valued at the date of sale/distribution.
Common mistakes
Using the 6-month value for an asset sold prior to that date.
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