LO7 Taylor dies on February 19 of the current year. Among the assets in his estate are 500 shares of Dane Company preferred stock. Taylor paid $14 per share for the stock on August 13, 2000. Market values per share for Dane preferred stock on various dates in the current year are as follows:

Taylor’s will provides that his niece Sherry is to receive the Dane shares. What is Sherry’s basis in the shares in each of the following circumstances?

a. No elections are made by the executor, and the shares are given to Sherry on April 1.

b. The executor validly elects the alternate valuation date, and Sherry receives the shares on November 21.

c. The executor validly elects the alternate valuation date, and Sherry receives the shares on April 1.

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February 19 $12 April 1 $18 August 19 $10 November 21 $16