Andy, 68, has a gross estate currently valued at $2,500,000 that consists primarily of highly appreciated growth securities. Within the last six months, Andy transferred $500,000 worth of these securities to his wife, Harriet. His cost in these securities was $200,000. Harriet recently died. The fair market value of the transferred securities at the time of her death was $500,000. The securities passed to Andy under the terms of Harriet's will. Which one of the following is an income tax

A)

Andy must recognize $300,000 in capital gain on the stock as of Harriet's death.

B)

If Andy sells the stock he received from Harriet immediately after her death, his gain, if any, will be deemed to be short-term capital gain.

C)

Andy's basis in the stock is $200,000.

D)

Andy's basis in the stock is $500,000.