Question

On September 1, Year 1, Pete Moss bought 2,500 shares of Bicycle Bob's, Inc. stock for $180,000. The FMVs of this stock on certain dates were as follows: July 23, Year 6$175,000 August 5, Year 6190,000 Moss died on July 23, Year 6, bequeathing this stock to his son, Joe. The stock was distributed to Joe on August 5, Year 6. No elections were made with respect to valuing the stock. Joe's basis in this stock is a. $175,000 b. $180,000 c. $190,000 d. $180,000 plus applicable inheritance taxes.

Answer 1

a. $175,000

Step-by-step explanation:

Given that

Purchased share = 2,500

Stock = $180,000

So, Joe's basis receives stock of Pete Moss is $175,000 and when stock is transmitted heritable from another person, the value of stock transfer after the death of the person.

Since, Pete Moss is died on 23 July and on that day the stock was $175,000. So, Joe receive stock $175,000.

Hence the correct option is a. $175,000