Magdalena was very close with her grandpa, Willie Makit, and was devastated when he died. Willie left Magdalena his New England cottage in his will. He had paid \($85,000\) for the cottage in 1975. When Willie died on January 14 of the current year, the cottage had a fair market value of \($535,000.\) The cottage had a fair market value of \($515,000\) on the alternate valuation date of July 14.

The cottage was distributed to Magdalena on March 31 when its fair market value was \($522,000\).

a. What is Magdalena’s basis in the cottage if the Executor does not elect the Alternate Valuation date?

b. What is Magdalena’s basis in the cottage if the Executor does elect the Alternate Valuation date?

Create an Excel spreadsheet using a Lookup table to solve for your answer.