Kay inherits stock which had a basis to the decedent of $42,000 and a fair marke

Question

Kay inherits stock which had a basis to the decedent of $42,000 and a fair market value of $37,000 on August 4, 2017, the date of the decedent’s death. The executor distributes the stock to Kay on Nov 12, 2017, at which time the fair market value is $46,000. The executor does not elect the alternate valuation date. Kay sells the stock on November 30, 2017, for $35,700. What is her recognized gain or loss? (I believe the answer is C because you would do: 37,000-35,700 and this would give you a 1,300 loss.. PLEASE EXPLAIN IN WORDS!)

A. ($6,300)

B. ($10,300)

C. ($1,300)

D. $700

E. None of the above

Explanation / Answer

sale value $35,700

Less: fair market value as on the date of distribution of stock to kay $46,000

Loss to be recognized ($10300)

Ans:B

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