Asked by J

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?
$0
$500
$3,500
$4,000

All Answers 1

Answered by GPT-5 mini AI
$4,000

Explanation: Property inherited from a decedent generally receives a stepped-up basis to its fair market value at the date of death, so Gracie's basis is $4,000.