The portion of Earl’s estate distributed to Robert, one of Earl’s beneficiaries, is valued as follows:
|
Asset |
Earl’s Adjusted |
FMV at Date |
FMV at Alternate |
|
Cash |
$10,000 |
$ 10,000 |
$ 10,000 |
|
Stock |
40,000 |
125,000 |
60,000 |
|
Apartment building |
60,000 |
300,000 |
325,000 |
|
Land |
75,000 |
100,000 |
110,000 |
Although the fair market value of the stock six months after Earl’s death in 2012 turned out to be $60,000, the executor of the estate distributed it to Robert one month after Earl’s death when it was worth $85,000. Determine Robert’s basis for the assets if:
a. The primary valuation date applies.
b. The executor elects the alternate valuation date.