1. Patty converted her main home to rental property two years ago when it was worth $70,000. Patty paid $85,000 for the house. What is Patty's basis in the house if after taking $10,000 of depreciation deductions she sells it for $66,000?

A. $60,000 B. $66,000 C. $70,000 D. $75,000 E. $85,000

2. Barbara sold 100 shares of STP Company stock to her daughter, Doris, for $7,000. The stock originally cost Barbara $10,000. Doris later sells the stock on the open market for $8,000. Doris recognizes:

A. No gain or loss B. a $1,000 gain C. a $2,000 gain D. a $3,000 loss E. a $2,000 loss

3. Benito died on May 23, 2021, bequeathing his entire $3,000,000 estate to his brother, Alfonso. The executor of Benito's estate validly elected to use the alternative valuation date. Benito's estate included 4,000 shares of listed stock, for which Benito's basis was $500,000. The stock was distributed to Alfonso eight months after Benito's death. The fair market values of this stock on various dates follow:

May 23, 2021 $600,000

November 23rd, 2021 $550,000

January 23rd, 2022 $530,000

Alfonso's basis in the stock is:

A. $500,000 

B. $530,000 

C. $550,000  

D. $600,000  

E. None of the above

Answer rating: 100% (QA)

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