Ed Gives Steve Land with an Adjusted Basis of $40,000

Multiple Choice

Ed gives Steve land with an adjusted basis of $40,000 and an FMV of $90,000. Ed paid no gift tax. Ed then inherits the same land back from Steve at Steve's death eight months later. At Steve's death, the land is worth $120,000. Ed's basis in the land becomes

A) $120,000.
B) $90,000.
C) $40,000.
D) cannot be determined from the facts given