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Rakhi Vasavada
Rakhi Vasavada, Financial and Legal Consultant
Category: Finance
Satisfied Customers: 2605
Experience:  Graduated in law with Emphasis on Finance and have have been working in financial sector for over 12 Years
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I was gifted my parents hours in 2011. I am thinking of selling

Customer Question

I was gifted my parents hours in 2011. I am thinking of selling it. The house was purchased in 2004 for $184,000. I think I can sell it for $170,000. Is the capital gains tax calculated base on the original price or the apprised value in 2011?
Submitted: 2 years ago.
Category: Finance
Expert:  Tax.appeal.168 replied 2 years ago.
In brief, when a person receives property as a gift from someone who is still living, then their basis carries over from the person or persons gifting the property to the receiver of the property. Keep in mind that the cost basis includes, not only the purchase price, but the cost of qualified improvements as well that your parents made. Example, if they made improvements of $30,000, their cost basis would now be $184,000 + $30,000 = $214,000 (this is just a sample figure). If there were no qualified improvements made, the $184,000 is what you start with. Let me know if you require further assistance with this matter.