How much income should duffy include in his current-year

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Problem - On February 1 of the current year, Duffy learned that he was bequeathed 1,000 shares of common stock under his father's will. Duffy's father had paid $12,500 for the stock 20 years ago. Fair market value of the stock on February 1 of the current year, the date of his father's death, was $14,000 and had increased to $15,500 six months later. The executor of the estate elected the alternative valuation date for estate tax purposes. Duffy sold the stock for $14,500 on June 1 of the current year, the date that the executor distributed the stock to him. How much income should Duffy include in his current-year individual income tax return for the inheritance of the 1,000 shares of stock which he received from his father's estate, assuming the estate tax law in effect for 2011 and forward?

a. $5,500

b. $4,000

c. $2,500

d. $0

Reference no: EM132660103

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