Jack and Jill were married and they lived in Miami Beach Flo

Jack and Jill were married and they lived in Miami Beach, Florida. They owned an undeveloped parcel of commercial real estate as joint tenants with right of survivorship which they purchased in 1999, and the property had an adjusted basis of $200,000 on February 7, 2017. Jack died on February 7, 2017 when the property had a fair market value of $450,000. Assume that there will be no estate tax payable with respect to Jack’s estate despite the value of the estate because of the applicable credit amount and the marital deduction. If Jill sells the property on August 7, 2017 for $750,000, how much gain will Jill realize on the sale? a. $300,000. b. $425,000. c. $0. d. $550,000. My answer is (c) 0. Am I on the right track? If not can you tell me what answer you derived at and how.

Solution

The answer is: a. $300,000. The property had an adjusted base of $ 200,000 until February 7, 2017. as of February 7, 2017 at the fair its value increased to $ 450,000 the property has from February 7, 2017 to August 7, 2017 a value of $ 450,000 Sale Value $ 750,000 Base value $ 450,000 Profit on Sale of property $ 300,000