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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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Lane please. in CA capital gains tax law after the step up

Customer Question

Lane please.in CA capital gains tax law after the step up can you also add to the basis the original cost of the home?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

We may not add stepped up basis ANT original purchase cost.
But if the stepped up basis is established because the property was inherited - we will adjust the basis by all improvement expenses AFTER it was inherited.

Expert:  Lev replied 9 months ago.

The basis of property inherited from a decedent is generally one of the following.
1.The FMV of the property at the date of the individual's death.
2.The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation.
3.The value under the special use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. This method is discussed later.
4.The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement.

If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes.

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