gifted property--can it be considered an investment?

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Subject Author Date gifted property--can it be considered an investment? Brew1 03-07-2009  Re: gifted property--can it be considered an inves... Bill 03-07-2009  Re: gifted property--can it be considered an inves... Phil Marti 03-08-2009  Re: gifted property--can it be considered an inves... Arthur Kamlet 03-08-2009  Re: gifted property--can it be considered an inves... brew.one 03-08-2009  Re: gifted property--can it be considered an inves... Gene E. Utterback, EA, RF... 03-09-2009  Re: gifted property--can it be considered an inves... brew.one 03-09-2009  Re: gifted property--can it be considered an inves... Arthur Kamlet 03-09-2009  Re: gifted property--can it be considered an inves... Gene E. Utterback, EA, RF... 03-10-2009  Re: gifted property--can it be considered an inves... Reggie 03-08-2009  Re: gifted property--can it be considered an inves... removeps-groups@yahoo.com 03-08-2009  Re: gifted property--can it be considered an inves... Stuart A. Bronstein 03-09-2009  Re: gifted property--can it be considered an inves... Gil Faver 03-10-2009  Re: gifted property--can it be considered an inves... Stuart A. Bronstein 03-10-2009  Re: gifted property--can it be considered an inves... Gil Faver 03-10-2009  Re: gifted property--can it be considered an inves... Stuart A. Bronstein 03-10-2009  Re: gifted property--can it be considered an inves... brew.one 03-10-2009  Re: gifted property--can it be considered an inves... DF2 03-08-2009
Posted by Brew1 on March 7, 2009, 6:02 pm Please log in for more thread options client received an interest in a residence as a gift. An accountant planted the idea that she can take a loss on the sale because it's "investment property." I recall the definition (but can't find the citation) of investment property as something along the lines of "purchased with the intent of selling at a profit." There was no purchase and property would be considered a personal residence for the owner who gifted the interest to the client. I've established her basis, the question here is can she take a loss? Thanks for your input. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Bill on March 7, 2009, 11:24 pm Please log in for more thread options brew.one@gmail.com (Brew1) posted: >client received an interest in a residence as a >gift. An accountant planted the idea that she >can take a loss on the sale because it's >"investment property." >I recall the definition (but can't find the citation) >of investment property as something along the >lines of "purchased with the intent of selling at >a profit." There was no purchase and property >would be considered a personal residence for >the owner who gifted the interest to the client. >I've established her basis, the question here is >can she take a loss? If as you say, the property was considered a personal residence for the owner who gifted an interest in that property to someone else, it appears it would not be proper to take a loss. One cannot write off a loss on a personal residence. Bill -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on March 8, 2009, 7:02 am Please log in for more thread options > brew.one@gmail.com (Brew1) posted: > >>client received an interest in a residence as a >>gift. An accountant planted the idea that she >>can take a loss on the sale because it's >>"investment property." > >>I recall the definition (but can't find the citation) >>of investment property as something along the >>lines of "purchased with the intent of selling at >>a profit." There was no purchase and property >>would be considered a personal residence for >>the owner who gifted the interest to the client. > >>I've established her basis, the question here is >>can she take a loss? Sorry, I don't know of a citation, but something seems to be missing from the story. If gifted property is sold at a loss basis is the lesser of the donor's adjusted basis at the time of the transfer or FMV at the time of the transfer. So there must have been some time in between the transfer and the sale for there to be a loss. What use was the recipient making of the property during that time? -- Phil Marti Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Arthur Kamlet on March 8, 2009, 5:03 pm Please log in for more thread options >> brew.one@gmail.com (Brew1) posted: >> >>>client received an interest in a residence as a >>>gift. An accountant planted the idea that she >>>can take a loss on the sale because it's >>>"investment property." >> >>>I recall the definition (but can't find the citation) >>>of investment property as something along the >>>lines of "purchased with the intent of selling at >>>a profit." There was no purchase and property >>>would be considered a personal residence for >>>the owner who gifted the interest to the client. >> >>>I've established her basis, the question here is >>>can she take a loss? > >Sorry, I don't know of a citation, but something seems to be missing from >the story. If gifted property is sold at a loss basis is the lesser of the >donor's adjusted basis at the time of the transfer or FMV at the time of the >transfer. So there must have been some time in between the transfer and the >sale for there to be a loss. I would state this differently: If gifted property has a FMV at time of gift lower than donor's basis, then basis is FMV at time of gift to compute loss and is donor's basis to compute gain. If gifted when FMV at time of gift is higher than donor's basis, use donors basis to compute gain or loss. Same results, different statement. -- -- ArtKamlet at a o l dot c o m Columbus OH K2PZH -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by brew.one on March 8, 2009, 5:15 pm Please log in for more thread options > What use was the recipient making of the property during that time? > -- > Phil Marti > Clarksburg, MD > it was a life estate; the recipient never used the property but received the proceeds while the grantor was still alive. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Gifted Stock- Schedule D January 31, 2008, 8:19 am When is an eFiled return considered filed? 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