Terrell and Michelle are married and living in New York, which is a not a community property state. They jointly own property with an adjusted basis of $240,000. On December 2 of this year, Michelle died when the property had a fair market value of $260,000. Terrell's basis in the property after Michelle's death is
A) $0.
B) $240,000.
C) $250,000.
D) $260,000.
C) $250,000.
[($240,000 × .50) + ($260,000 × .50)] = $250,000. Terrell's adjusted basis is 1/2 of the adjusted basis of the property plus 1/2 of the FMV of the property on Michelle's date of death.
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