Question

What is the trust’s basis of property, where the grantors adjusted basis at the time of funding in the property is $8500?

$0

$4,250

$8,500

$17,000

Answer 1

Trust’s Basis of property shall be determined as follows:

1. Basis at the time of funding of property.
2. Increased by the amount of additions made to the property.
3. Decreased by depreciation due to any consumption, wear, tear and age of the property.

In the Question it is given that the Basis at the time of Funding is $ 8,500. And it does not say about any additions or depreciation. Treating it as Non- Depreciable Property (like Land) and no additions are made to the property it is optimal to say that the basis of the property is $8,500.