Question
Gracie inherited a gold necklace from her grandfather. The original cost of the necklace was $3,500 and the fair market value when her grandfather died was $4,000. What is Gracie's basis for the necklace?
Answers
GPT-4o mini
Gracie's basis for the inherited gold necklace is determined by its fair market value (FMV) at the time of her grandfather's death. In this case, the FMV of the necklace was $4,000 when her grandfather died.
For inherited property, the basis for the heir is generally the fair market value at the date of the decedent's death, regardless of the original cost of the property. Therefore, Gracie's basis for the necklace would be **$4,000**.
For inherited property, the basis for the heir is generally the fair market value at the date of the decedent's death, regardless of the original cost of the property. Therefore, Gracie's basis for the necklace would be **$4,000**.