I am having trouble with understanding Basis and how the FMV

I am having trouble with understanding Basis and how the FMV work. Needing more clarification.

Mark for follow up Question 21 of 81. Martha inherited a cottage from her father with a basis of $50,000 and a FMV of $78,000. When Martha died, her son, Noah, inherited the cottage, now worth $110,000. Which of the following statements is true? O Martha\'s basis was $78,000 and Noah\'s basis is $110,000. O Martha\'s basis was $50,000 and Noah\'s basis is $78,000 O Martha\'s basis and Noa\'s basis remain at the original basis of $50,000. If Noah sells the property, his basis is $110,000, but his basis for depreciation is S50.000. Mark for follow up Question 22 of 81

Solution

The correct choice is :- Martha\'s basis was $ 78,000 and Noah\'s basis is $ 110,000

Explanation : - Inherited property is assigned a basis equal to the property\'s fair market value on the date of the decendent\'s death . This is called \" stepped up basis\" because the basis of the property to the recipient steps up from whatever the decendent\'s basis was to its FMV at the decendent\'s death.