Lee inherited a partnership interest from Dale. The adjusted basis of Dale’s partnership interest was $50,000, and its fair market value on the date of Dale’s death (the estate valuation date) was $70,000. What was Lee’s original basis for the partnership interest?

$70,000

Explanation:

The requirement is to determine the original basis of Lee's partnership interest that was received as an inheritance from Dale.

The basis of property received from a decedent dying  is generally its fair market value as of date of death.

Since fair market value on the date of Dale's death was used for estate tax purposes, Lee's original basis is $70,000.

$70,000

Explanation:

Lee’s original basis for the partnership interest is $70,000 because the property collected from a decedent through inheritance, a taxpayer will generally often assumes a basis equal to the fair market value of that property at the date of the decedent's death which is why Lee's original basis in the partnership was $70,000 - the fair market value of Dale's partnership interest at the date of his death.

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