Ruth Ames died on January 10,2019. In filling the estate tax return her executor, Melvin...
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Ruth Ames died on January 10,2019. In filling the estate tax return her executor, Melvin Sims, elects the primary valuation date and amount ( fair market value on the death). On March 12. 2019 Melvin invests 30k of cash that Ruth had in her money market account in acquiring 1,000 shares of Orange Inc. ( $30 per share). On January 10,2019 , Orange was selling for $29 per share. The stock is distributed to a beneficiary Annette Rust on June 1 2019, when it is selling for $33.
Melvin wants you to determine the amount at which the orange shares should appear on the estate tax return and the amount of Annettes adjusted basis for the stock. Write a letter on Melvin in which you respond to his inquiry and prepare a memo for the Tax files.
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