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Lev
Lev, Tax Advisor
Category: Tax
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My mom died in February leaving her home in a trust to my brothers

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My mom died in February leaving her home in a trust to my brothers and I. Do I need to have that property assessed at date of death for any tax issues. The house is on the market now for 160,000. and it constitutes the major amount of her estate with the remaining just over 20k cash.
Submitted: 6 years ago.
Category: Tax
Expert:  Lev replied 6 years ago.

I assume that your mother had a living trust - that was a revocable trust and became irrevocable after your mother's death. In this case assets left in the trust are considered as inherited.

 

The IRC 1022 is used to establish a basis for inherited assets acquired from a decedent dying after December 31, 2009 - http://www.law.cornell.edu/uscode/html/uscode26/usc_sec_26_00001022----000-.html

(a) In general

Except as otherwise provided in this section-

(1) property acquired from a decedent dying after December 31, 2009, shall be treated for purposes of this subtitle as transferred by gift, and

(2) the basis of the person acquiring property from such a decedent shall be the lesser of-

(A) the adjusted basis of the decedent, or

(B) the fair market value of the property at the date of the decedent's death.

 

However - the basis may be increased - up to the fair market value of the inherited property - but the aggregate basis increase under this subsection may not be more than $1,300,000.

So - in your situation - the basis would be a FMV at the time your mother died.

If you will sell shortly after that time - you may assume that the property value has not been changed - and the sale price may be used as a fair market value.

 

You also may find helpful IRS publication 559 - www.irs.gov/pub/irs-pdf/p559.pdf

Please let me know if you need any help.

 

 

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