What is the basis of the property to Ed

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Reference no: EM132659825

Problem - Dan bought a hotel for $2,600,000 in January 2015. In May 2019, he died and left the hotel to Ed. While Dan owned the hotel, he deducted $289,000 of cost recovery. The fair market value in May 2019 was $2,800,000. The fair market value six months later was $2,850,000.

Required -

a. What is the basis of the property to Ed?

b. What is the basis of the property to Ed if the fair market value six months later was $2,500,000 (not $2,850,000) and the objective of the executor was to minimize the estate tax liability?

Reference no: EM132659825

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