C is corrent. Since the definition of gross income excludes property received as a gift, bequest, devise, or inheritance, Howe recognizes no income upon receipt of the stock. Since the executor of his father’s estate elected the alternate valuation date (August 1), and the stock was distributed to Howe before that date (June 1), Howe’s basis for the stock would be its $5,000 FMV on June 1. Since Howe also sold the stock on June 1 for $5,000. Howe would have no gain or loss resulting from the sale.
A is incorrect. Since the definition of gross income excludes property received as a gift, bequest, devise, or inheritance, Howe recognizes no income upon receipt of the stock. Since the executor of his father’s estate elected the alternate valuation date (August 1), and the stock was distributed to Howe before that date (June 1), Howe’s basis for the stock would be its $5,000 FMV on June 1. Since Howe also sold the stock on June 1 for $5,000. Howe would have no gain or loss resulting from the sale.
A is incorrect. Since the definition of gross income excludes property received as a gift, bequest, devise, or inheritance, Howe recognizes no income upon receipt of the stock. Since the executor of his father’s estate elected the alternate valuation date (August 1), and the stock was distributed to Howe before that date (June 1), Howe’s basis for the stock would be its $5,000 FMV on June 1. Since Howe also sold the stock on June 1 for $5,000. Howe would have no gain or loss resulting from the sale.
D is incorrect. Since the definition of gross income excludes property received as a gift, bequest, devise, or inheritance, Howe recognizes no income upon receipt of the stock. Since the executor of his father’s estate elected the alternate valuation date (August 1), and the stock was distributed to Howe before that date (June 1), Howe’s basis for the stock would be its $5,000 FMV on June 1. Since Howe also sold the stock on June 1 for $5,000. Howe would have no gain or loss resulting from the sale.
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