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Posted by Stuart A. Bronstein on December 30, 2006, 2:48 pm
Please log in for more thread options >>>> Parent transfered house to son for $1 in 1990. Son sold in
>>>> 2006. Would the house basis be the FMV on the date he bought
>>>> or really looks like inherited?
>>> Neither. Your basis is $1,
>> or the parent's basis, if higher.
> If the parents didn't file a proper gift return, I don't see
> that the son could use their basis. If he bought a house
> from a stranger at a bargain price, his basis is the
> (bargain) sale price. I understand that dealing with a
> relative has its own set of tax concerns and warnings. So
> where is the gift aspect accounted for?
It's a gift even if a gift tax return was not filed. The
effect is that the statute of limitations never runs on the
return, and the value of the property will be pulled back
into the parents' estate, though that is unlikely to result
in a stepped up basis.
I don't remember off the top of my head if the value
included in the estate will be the value on the date of the
gift, or the date of death.
Stu
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