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24 April, 18:05

Your client, Sherman Simmons, purchased stock for $120,000 in 2000. He died 6 months ago (2019) and left all of his property to his wife, Sylvia. The FMV of the stock on the date of death was $70,000. The stock value on the alternate valuation date was $80,000. If Sylvia sells the stock on the alternate valuation date, what will be the income tax result?

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  1. 24 April, 18:50
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    long term gain incure = $10,000

    Explanation:

    given data

    purchased stock = $120,000

    stock on the date of death = $70,000

    stock value on the alternate valuation date = $80,000

    solution

    as per given Sherman passed and all of property left for his wife under marital deduction

    Because there no federal tax is applicable

    so that sylvia basis will be FMV date of death as gain

    gain will incure = proceeds amount - basis ... 1

    gain incure = $80,000 - $70,000

    gain incure = $10,000
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