What basis will m have in the acme shares

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Question - During the taxable year, beneficiary M receives 100 shares of Acme common stock from Trust T. The basis of the stock is $70 per share to the trust, and its fair market value at date of distribution is $110 per share. The trust's DNI for the year is $60,000, all of which is taxable. There were no other distributions made or required to be made by the trust.

A) Assume the stock distribution was in satisfaction of an $11,000 pecuniary bequest to M. What is the tax result to M? To Trust T? What basis will M have in the Acme shares?

B) Assume the distribution did not represent a specific bequest to M, and that Trust T did not make a §643(e)(3) election with regard to the distribution of the Acme shares. What is the tax result to M? To Trust T? What basis will M have in the Acme shares?

Reference no: EM131940861

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