Question ID: $1252043$

Andy, age $68,$ has a gross estate currently valued at $$2,500,000$ that consists primarily of highly appreciated growth securities$.$ Within the last six months, Andy transferred $$500,000$ worth of these securities to his wife, Harriet. His cost in these securities was $$200,000.$ Harriet recently died. The fair market value of the transferred securities at the time of her death was $$500,000.$ The securities passed to Andy under the terms of Harriet's will.

Which one of the following is an income tax implication of the transfer of stock?

A$)$

Andy's basis in the stock is $$200,000.$

B$)$

Andy's basis in the stock is $$500,000.$

C$)$

Andy must recognize $$300,000$ in capital gain on the stock as of Harriet's death.

D$)$

If Andy sells the stock he received from Harriet immediately after her death, his gain, if any, will be deemed to be short$-$term capital gain.