Mhe inheris a house after his father dies. His fathers adjusted basis fh the house \( \$ 175,000 \), and the house ls worth \( \$ 265,00 \) when his father dited. What is Mises basis? \[ \$ 0 \] \( \$ 175,000 \) \( \$ 220,000 \)

To determine Mhe's basis in the inherited house, we need to consider the concept of "stepped-up basis." When a property is inherited, the basis of the property is generally adjusted to its fair market value (FMV) at the time of the decedent's death. Here are the known conditions: - The adjusted basis of the house (the father's basis) is \( \$ 175,000 \). - The fair market value of the house at the time of the father's death is \( \$ 265,000 \). Since Mhe inherited the house, his basis will be the fair market value at the time of inheritance, which is \( \$ 265,000 \). Thus, Mhe's basis in the house is: \[ \text{Mhe's basis} = \text{FMV at the time of inheritance} = \$ 265,000 \] However, the options provided do not include \( \$ 265,000 \). The closest relevant basis in the context of inheritance is the fair market value, which supersedes the father's adjusted basis. Therefore, Mhe's basis is not \( \$ 0 \), \( \$ 175,000 \), or \( \$ 220,000 \). The correct basis is \( \$ 265,000 \), but since that option is not available, it seems there may be a misunderstanding in the options provided. If we strictly adhere to the options given, none of them accurately reflect Mhe's basis based on the inheritance rules.