LO.4 Emily makes a gift of 1,000 shares of appreciated stock to her uncle, Randolph, on January 28, 2012. The basis of the stock is $30,000, and the fair market value is $80,000. Randolph dies on November 8, 2012. Under the provisions of Randolph’s will, Emily inherits 1,000 shares of the stock. The value of the stock for Federal estate tax purposes is $95 per share.

a. What is the basis of the inherited stock to Emily?

b. What would have been the basis of the inherited stock to Emily if she had given the stock to Randolph on January 5, 2011?