LO.4 In June 2011, Reba gives Julius a house (basis of $150,000; fair market value of

$450,000) to be used as his personal residence. Before his death in May 2012, Julius installs a tennis court in the backyard at a cost of $25,000. The residence has a value of

$465,000 when Julius dies. Determine the income tax basis of the property to the heir based on the following independent assumptions.

a. The residence passes to Reba.

b. The residence passes to Burl (Reba’s husband).

c. The residence passes to Tina (Reba’s daughter).