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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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15 years ago, my father in law gave us a rental property.

Resolved Question:

15 years ago, my father in law gave us a rental property. How do we figure capitol gains on this.
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello Peeka,

When you receive property as a gift, you retain the same basis in the property as the donor's basis.

Your basis in this property would be whatever your father in law originally paid for the property, plus the cost of any improvements he made while he owned it, plus the cost of any improvements you made once you took over ownership.

Your gain is then figured by taking your selling price less that basis. Any gain you have there is taxed as a long term capital gain which currently is capped at 15%.

In addition, you must recapture any depreciation which was claimed on the property. The depreciation which you and/or your father in law claimed on this property is taxed at a special rate of 25%.

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Thank you Peeka.

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