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Posted by brownie on March 30, 2007, 11:06 pm
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> This question involves a rental property purchased by
> brother and sister in 1981. Brother (my client) filed MFJ
> with his wife, claiming his half of depreciation expenses;
> sister filed her own tax return, claimimg her half of
> depreciation expenses. Sister died in 1995 when house was
> re-appraised. Brother inherited her half of rental property
> and a stepped-up basis. Brother sold house in 2006.
>
> 1. Normally, for the capital gains computation, the basis is
> reduced by depreciation "allowed or allowable." Now that
> the house has been sold, does brother reduce the basis by
> the total amount of depreciation claimed by both he and his
> sister separately or just the amount of depreciation claimed
> on his own tax returns from 1981-1995?
>
> 2. Without any other information, I am assuming the
> depreciable (house) portion of the property is two-thirds of
> the total, with the undepreciable land being the remaining
> one-third. Is that a reasonable estimate?
>
> 3. In 1981, was this 15 year real property ACRS
> depreciation?
1. His basis in 2006 is his original basis on his portion of
the property reduced by his allowable depreciation from
1981-2006 plus the 1995 FMV of the portion inherited reduced
by his allowable depreciation on that portion from
1995-2006.
2. I have heard an 80% house 20%land is sometimes used.
3. Don't know
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