Helene and Pauline are twin sisters who live in Louisiana and Mississippi, respectively, Helene is married to Frank, and Pauline is married to Richard. Frank and Richard are killed in an auto accident in 2013 while returning from a sporting event. Helene and Frank jointly owned some farmland in Louisiana (value of $940,000, cost of $450,000). Pauline and Richard jointly owned some farmland in Mississippi (value of $940,000, cost of $450,000).Assume that all of Franks and Richards property passes to their surviving wives. a. Calculate Helenes basis in the land. b. Calculate Paulines basis in the land. c. What causes the difference? Solution a) $940,000 b) $450,000/2= $225,000; $940,000/2=$470,000 $225,000 + $470,000= $695,000 c) Helene\'s land is community property . So Helene\'s basis for the land is the fair market value of $940,000 on the date of Frank\'s death. Pauline\'s land is common law property . So Pauline\'s basis for the land is stepped up only for one-half the of interest passing from Richard. .

1. Helene and Pauline are twin sisters who live in Louisiana and Mississippi, respectively, Helene
is married to Frank, and Pauline is married to Richard. Frank and Richard are killed in an auto
accident in 2013 while returning from a sporting event. Helene and Frank jointly owned some
farmland in Louisiana (value of $940,000, cost of $450,000). Pauline and Richard jointly owned
some farmland in Mississippi (value of $940,000, cost of $450,000).Assume that all of Franks
and Richards property passes to their surviving wives.
a. Calculate Helenes basis in the land. b. Calculate Paulines basis in the land. c. What causes the
difference?
Solution
a) $940,000
b) $450,000/2= $225,000; $940,000/2=$470,000
$225,000 + $470,000= $695,000
c) Helene's land is community property . So Helene's basis for the land is the fair market
value of $940,000 on the date of Frank's death. Pauline's land is common law property . So
Pauline's basis for the land is stepped up only for one-half the of interest passing from Richard.