TXX5774 Decedent at death owned 400 shares of xyz having a value as reported on

Question

TXX5774

Decedent at death owned 400 shares of xyz having a value as reported on the NY stock exchange of $800 and for which he had paid $300.A federal estate tax was not required for the decedent's estate. The estate sells the 400 shares of XYZ Corporation for $500.

a.       the estate recognizes neither capital gain nor loss on the sale.

b.       the estate recognizes a short term capital loss on the sale.

c.        the estate recognizes a long term capital loss of $300 on the sale.

d.       the estate recognizes a short term capital loss of $500 on the sale.

Explanation / Answer

Any transfer of a capital on the death of an assessee are not subjected to any capital gains tax.

In the given case, the shares were transferred by the estate on the death of decedent hence there is no capital gain tax.

Option a.

the estate recognises neither capital gain nor loss on the sale.

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