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:

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

Asset A: 0,000; Asset B: 0,000

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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