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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28878
Experience:  Taxes, Immigration, Labor Relations
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A person inherited a life estate in farm land and paid inheritance

Resolved Question:

A person inherited a life estate in farm land and paid inheritance tax on the FMV of the life estate. Can she write off the FMV over his estimated life expectancy?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

Hi and welcome to Just Answer!
Inheritance taxes are added to the basis of the property.
The basis of inherited property is generally a fair market of the property at the time the decedent died.
However if the decedent died after Dec 31, 2009 - the a different law applies - the basis would be the same as decedent had - but may be increased up to the fair market value - but such increase may not be more than $1,300,000.

The basis may not be deducted estimated life expectancy of the beneficiary.
However when the property is sold - the basis will reduce the capital gain.

The capital gain = (selling price) - (basis) - (selling expenses)

Let me know if you need any help.

Customer: replied 5 years ago.
The question was whether or not the FMV of an inherited life estate can be deducted for income tax purposes over the the life of the life estate beneficiary.
Expert:  Lev replied 5 years ago.

The FMV of an inherited life estate MAY NOT be deducted for income tax purposes.

There is no such law to allow the deduction as you stated.

 

Please feel free to ask if you need any clarification.

 

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