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Posted by Seth Breidbart on December 28, 2006, 9:13 pm
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> Parent transfered house to son for $1 in 1990.
That was a gift.
> Son sold in 2006. Would the house basis be the FMV on the
> date he bought or really looks like inherited?
On a gift, the son has the same basis as his parents did.
Seth
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Posted by ed on December 28, 2006, 9:13 pm
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SMF wrote:
> 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?
ed
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Posted by SMF on December 29, 2006, 8:52 pm
Please log in for more thread options Paul Thomas, CPA wrote:
>> 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?
> It looks like parents gifted house to son. Therefore the
> basis is the parents basis + $1 he paid.
>
> There would be, of course, differing answers if more
> information about the house, who lived there for the past 16
> years, was it rented, etc. were known.
What if the parent lived in the house until they passed in
2005? Hopefully that changes things....tax wise that is..
Thanks
<< ======================================================= >>
<< 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. >>
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<< to this newsgroup as well as our anti-spamming policy >>
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Posted by Stuart A. Bronstein on December 30, 2006, 2:48 pm
Please log in for more thread options > Paul Thomas, CPA wrote:
>>> 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?
>> It looks like parents gifted house to son. Therefore the
>> basis is the parents basis + $1 he paid.
>>
>> There would be, of course, differing answers if more
>> information about the house, who lived there for the past 16
>> years, was it rented, etc. were known.
> What if the parent lived in the house until they passed in
> 2005? Hopefully that changes things....tax wise that is..
As someone else mentioned, it would come under §2036, which
says that the parents are treated as the owners when they
die, it is included in their taxable estate for estate tax
purposes, and the basis is stepped up to the value on the
date of death.
Stu
<< ======================================================= >>
<< 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. >>
<< >>
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<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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Posted by Bill Brown on December 29, 2006, 9:11 pm
Please log in for more thread options Seth Breidbart wrote:
>> As to basis, because this is in substance a gift, Son would
>> have taken a transferred basis in the house equal to
>> Parent's basis in the house at the time of the transfer in
>> 1990, increased by $1 to reflect Son's investment of $1 in
>> the house.
> I don't think so; I think it's the greater of parent's basis
> or $1.
>
> Consider a $300,000 house (parent's basis $200,000) sold as
> a gift to the child for $150,000. The child wouldn't get a
> basis of $350,000.
The child's basis is the amount paid + the amount of the
gift. Using your $300,000 house as an example, the child's
basis would be $150,000 (cash paid) + $150,000 (the amount
of the gift).
<< ======================================================= >>
<< 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 (2006) - All rights reserved. >>
<< ======================================================= >>
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