How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tax.appeal.168 Your Own Question

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2574
Experience:  Nearly 30 years of varied tax industry exp. Tax Biz owner
58285678
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

There is a second home I own in Michigan which is being sold.

Resolved Question:

There is a second home I own in Michigan which is being sold. It was built by my uncle over several years. He included my name on the deed along with my aunt and himself. They are now deceased and the property is in my name only. I live in Massachusetts.
The property is being sold for $91,000 with a net of $83846.00 after settling costs. How do I estimate what the capital gains tax will be for me? Are there things which I can deduct from the sale price like estimating his building costs/repairs?

I would greatly appreciate your help. Many thanks.
Submitted: 3 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 3 years ago.
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.


The original basis of the property is adjusted by deductions, such as depreciation, or by additions, such as capital improvements. Adjusted basis is the new basis after additions or deductions to the original basis have been made. The basis for determining gain on inherited property is the property's fair market value on the date of the decedent's death. Fair market value is the price that property would sell for on the open market. The gain or loss from the disposition of the property is determined by comparing the sale price to the adjusted basis in the property. The tax rate on the gain is 15%.

Customer: replied 3 years ago.
Can you give me more specifics (examples) of 'adjusted basis' - what does this mean?
Expert:  Tax.appeal.168 replied 3 years ago.
Hello again,

In this case basis is just another word for cost. So when we refer to adjusted basis, we are really saying adjusted cost. So once you deduct selling fees, depreciation, and capital improvements (building repairs), you will have the adjusted basis/adjusted cost. This is the amount that will be subtracted from the selling price to determine the true capital gain on the property. However, determining the adjusted basis does not apply to you because you inherited the property. You can ignore the adjusted basis lingo all together.

Let's say the FMV (Fair market value) of the property was $650,000 at the time of your uncle's death. The $650,000 would be the starting number to determine the true capital gain. The property sales for $750,000. Your gain would be $100,000. The $100,000 will be taxed at the 15% capital gains rate.

----------------------------------

Basis of Inherited Property

The basis of inherited property is usually its fair market value at the time of the donor's death. There are three exceptions to this rule.

1. If a federal estate tax return is required and if the property must be included in the decedent's gross estate, the basis may be the special-use valuation if special-use valuation is elected.

2. If a federal estate tax return is required and if the property must be included in the decedent's gross estate, the basis may be the fair market value on the alternate valuation date if alternate valuation is
elected. Special-use and alternate valuation are permitted only under special circumstances.

3. When an heir, or an heir's spouse, gifted the property inherited to a person who dies within one year of the gift the basis of the inherited property is the deceased person's basis immediately before death rather than its fair market value. This is the same as the original owner's basis prior to the original gift. This rule
came into effect in 1981 to prevent individuals from gaining the benefit of basis stepped up to fair market value by a temporary transfer of property to elderly persons.

Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 2574
Experience: Nearly 30 years of varied tax industry exp. Tax Biz owner
Tax.appeal.168 and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Tax.appeal.168
Tax.appeal.168
Principal
2275 Satisfied Customers
Nearly 30 years of varied tax industry exp. Tax Biz owner