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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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On April 13, 1999, My wife and I purchased 20 acres of real

Resolved Question:

On April 13, 1999, My wife and I purchased 20 acres of real estate for 180,000, taking in joint tenancy with rights of survivorship. My wife passed away on October 1, 2009 when the fair market value of the property was 300,000.

What is my basis in the property after the death of my wife?
Also What is my gain if I sell the property for 325,000 now?

Can a tax expert answer. Thank You
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello Morris,

Assuming that you and your wife did not live in a community property state, your new basis upon your wife's death is figured as follows:

You receive a stepped up basis to FMV on the half you inherit from your wife and you retain your original basis on the half you already own.

As a 50% owner, your original basis was $90,000 (half of the purchase price). On the half you inherit from your wife, your basis is half of the fair market value which is $150,000. So your total new basis is now $240,000. If you now sell the property for $325,000, you have a gain of $85,000.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you Morris.

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