Tax

Have a Tax Question? Ask a Tax Expert

Ask an Expert,
Get an Answer ASAP!

Tax
This answer was rated:

My father inherited property in 1975 and created life estate

deeds with his four children...
My father inherited property in 1975 and created life estate deeds with his four children as remaindermen in 2/1999. He is now 84 years old and wants to sell the land. Is his basis calculated when in inherited in 1975 or when he gifted it to his children in 1999? Also, do the children have basis?
Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
7/29/2013
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified

LEV :

Hi and welcome to Just Answer!
As a general rule - the basis is the purchase price.
When the property is inherited - the basis is the fair market value of the property at the time the decedent passed away.

LEV :

When the property is gifted - the basis for the recipient of the gift is generally the lesser of the donor's basis and the fair market value (FMV) at the time of gifting. Thus - if the property increased in value - the donor's basis should be used, but if the property value decreased - the basis would be the FMV.
Because - the value of the land most likely increased between 1975 and 1999 - the basis of the gifted portion of the land is likely its fair market value in 1975.

Customer:

Thank you, XXXXX XXXXX my question.

LEV :

If the property is sold now - we need to determine two values - the value of the life estate and the value of the remainderman interest. Thus - each owner will report the sale transaction of a percentage of the land he/she owns.

Customer:

Yes, I found the tables with those figures.

LEV :

The value of the life estate is determined based on the age of your father at the time the property is sold.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
Verified
Lev and 87 other Tax Specialists are ready to help you
Ask your own question now
Ask Lev Your Own Question
Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
30,132 Satisfied Customers
Experience: Taxes, Immigration, Labor Relations

Lev is online now

A new question is answered every 9 seconds

How JustAnswer works:

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

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.WMatteson, 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.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, 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.

OrvilleHesperia, 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!!!!

AlexLos 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.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,300 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,310 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

Robin D.

Robin D.

Senior Tax Advisor 4

13,695 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,651 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

R. Klein, EA

R. Klein, EA

Enrolled Agent

1,839 satisfied customers

Over 20 Years experience

< Previous | Next >

Related Tax Questions
I inherited rental properties. I got an LLC set up using an
I inherited rental properties. I got an LLC set up using an EIN number with a property management who no longet works for me.Can I remove their EIN number? legalgems… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
My wife inherited a piece of rental property from a
My wife inherited a piece of rental property from a revocable trust that her parents had set up after her father and brother died her mom did an amendment that made her trustee and sole heir. Her mom … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Under the IRC, a taxpayer who inherits property gets an
Under the IRC, a taxpayer who inherits property gets an automatic, income-tax-free, step-up in basis for that asset. That is, the heir uses the property's value on the deceased's date of death (or 6 m… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
On a property sale which 4 members have a 1/3 interest on
On a property sale which 4 members have a 1/3 interest on the sale. … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
Mortgage Interest Taxpayer inherited two homes in the same
Mortgage InterestTaxpayer inherited two homes in the same year. One from each parent, both were primary resident of deceased parent. Deceased parents were divorced and both died within 12 months of ea… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
My son inherited a property in Romania from his ant who was
My son inherited a property in Romania from his ant who was German citizen. Does he has to pay inheritance taxes to Germany for the property inherited in Romania, because she was German citizen?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
I have inherited a property in California that is currently
I have inherited a property in California that is currently in escrow. How will I be taxed for the money I make on the sale of the property? … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
We have two parties is sale of property they inherited .a
We have two parties is sale of property they inherited .a court based the amount at tax assessment of 156000 at their mom's death value was 84000 which is a 72000 gain. At a hearing a judge ordered a … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Sold Mineral interest that are not producing. Inherited it
Sold Mineral interest that are not producing. Inherited it in the 1970's trying to figure out what taxes I owe or where I can place the money to defer some of the tax liability.… read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
I have remarried and have property and inheritance property
Hello, I have remarried and have property and inheritance property that I want to insure goes to my children and not my spouse. Should have done prenup but what are my options now? Married 2 years. … read more
Chad CFP ®
Chad CFP ®
Certified Financial Planner(R), Pro
Master\u0027s Degree
723 satisfied customers
My husband has worked under the table for several reasons
my husband has worked under the table for several reasons for many years. He would like to figure out how to move 'back onto the radar" How do we go about figuring out what to do? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Sold property in Maine that was an inheritance. Live in
Sold property in Maine that was an inheritance. Live in Ohio. What tax forms will dI recieve from irs and what information will be on forms. Wondering if inheritance will put me in higher tax bracket… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Regarding a 1031 exchange, 6 of us inherited a property in
Regarding a 1031 exchange, 6 of us inherited a property in 2014, we were told that we had to file the taxes using a partnership and the title of the property was a nightmare. The title is being fixed … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,217 satisfied customers
Inherited a property in Florida in 2014. Transferred deed to
Inherited a property in Florida in 2014. Transferred deed to a partnership LLC and used for rental income. Just sold for about a 30k capital gain after closing cost. Any tax burden other than capital … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Inherited property without will. He's the only heir. He's
Inherited property without will. He's the only heir. He's been living in the house since ten years ago. The brother who is in the deed died four years ago. What is his basis when he sold the house now… read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,310 satisfied customers
Inherited Property - A client inherited raw land in 2006.
Inherited Property -A client inherited raw land in 2006. FMV (stepped up basis) was $ 77K. Property was sold in 2016 for $ 10K. Are they allowed to take a loss?If the original basis from the person th… read more
TaxWhisperer
TaxWhisperer
Principal
Master's Degree
24 satisfied customers
Issues for inherited property? Is it taxable, This is in
issues for inherited property? Is it taxable JA: Since estate law varies from place to place, can you tell me what state this is in? Customer: This is in Tennessee JA: Has anything been filed or repor… read more
Lev
Lev
Tax Advisor
30,132 satisfied customers
I inheritated some property. i sold that property for
i inheritated some property. i sold that property for $27000 … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
13,695 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x