Question

Tobin inherited 100 acres of land on the death of his father in 2020. A Federal estate tax return was filed and the land was valued at $300,000 (its fair market value at the date of the death). Tobin's father originally acquired the land in 1977 for $19,000 and prior to his death made permanent improvements of $6,000. What is Tobin's basis in the land

Answer 1

Answer:

$300,000

Explanation:

From the above passage, the information given is that the land was valued at $300,000 which is the fair market value price as at when Tobin's father died. What this means is that the amount of $300,000 will be Tobi's basis in the land although the land was purchased by his father at the cost of $19,000 in 1970.

Since the federal estate tax return was filed, and the value of the land was $300,000, hence his basis(Tobin) in the land would be $300,000