Neal and his wife Faye reside in Texas, a community property state. Their community property consists of real estate (adjusted basis of $800,000; fair market value of $6 million) and personal property (adjusted basis of $390,000; fair market value of $295,000). Neal dies first and leaves his estate to Faye. What is Faye’s basis in the property after Neal’s death?
A. $800,000 real estate and $295,000 personal property.
B. $800,000 real estate and $390,000 personal property.
C. $3,400,000 real estate and $295,000 personal property.
D. $6,000,000 real estate and $295,000 personal property.
Answer: D
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