Max and Francine were married for 20 years before Francine died. Max and Francine lived in Texas, a community property state. Francine left all of her assets to Max when she died. Max and Francine jointly owned their residence which they had purchased for $200,000 twelve years ago. Over the years they spent $80,000 remodeling the home. When Francine died, the house was valued at $600,000. What is Max's basis in the house following Francine's death?
The correct answer will be $600,000 [the basis is the current/fair market value].
Explanation:
Purchase price $200,000
Money spent remodeling $80,000
Value of the house $600,000
Basis=Current Value of the property,
Max's basis is thus $600,000
Under the recognition of the property and it's net value from the time of acquisition, the current value of the property that has been estimated is the basis of the property in question.This is often adjusted for the time value of money as well as the depreciation costs on the property.
Get Answers For Free
Most questions answered within 1 hours.