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Basis and holding period for land acquired by Jessica

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Jessica inherits land from her uncle. His adjusted basis in the land (purchased in 1997) was $60,000 and it was included in his estate at a value of $150,000.

a. Determine Jessica's basis and holding period for the land.

b. Determine Jessica's basis and holding period for the land if it was included in her uncle's estate at a value of $55,000.

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Solution Summary

The solution explains the possible results of a step up in basis, as well as a step down in basis for Jessica's land inherited from her uncle.

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a. Jessica's holding period generally starts as of the date of death, but there are exceptions for the sale of property sold within the short term capital gain period. In the event she sold the property within 12 months after date of death, it ...

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