Question

Gary inherited a maine summer cabin on 10 acres from his grandmother. his grandparents originally purchased the property for $500 in 1950 and built the cabin at a cost of $10,000 in 1965. his grandfather died in 1980 and when his grandmother recently passed away, the property was appraised at $500,000 for the land and $700,000 for the cabin. since gary doesn't currently live in new england, he decided that it would be best to put the property to use as a rental.

Answer 1

Gary’s basis in the land and in the cabin is the basis of inherited possessions is the fair market value on the time of death or, if chosen by the estate, the alternative valuation date if less. As a result, Gary’s base will be $500,000 in the land and $700,000 for the cabin.