I had a rental property
(townhome) that I rented out(never lived in it). In May of 2011 I had to retire because of lung cancer and chemo theraphy. I paid $102,000 for the property
in Nov.2002. In may 2011, I could no longer make the payments. From that date forward, my son took over the payments for me and gave me the positive monthly cash flow of $250. I quit claimed the property to my son in May 2013. to pay back what he had paid in mortgage payments and H.O.A. fees.
I paid $40,000 as a down payment on the property in 2002. The money came from a 1031 exchange from the sale of a 4-plex.(this was always a rental, I never lived in the property)
Does the $40,000 get added to the basis of the exchange property? How does the I.R.S. get taxes
from me for the original $40,000. Does it start from 2013 when I paid back the debt that I owed my son? My only income
at this time is Social Security, I no longer own any real estate, and I am in bankruptcy
as of Aug.2014. I am 78 years old.
thank you for your assistance-----***** **********@******.***