How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 12665
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

Around 1942 my great grandfather purchased 1200 acres of farmland

Customer Question

Around 1942 my great grandfather purchased 1200 acres of farmland in Mississippi for $6.00 dollars an acre. Later he purchased 636 acres of farmland in Louisiana. He gave his farmland to his two daughters and son. In 2006 my grandmother started an LLC, while she was alive, and transferred her ownership, which was 1/4 an interest in the 1200 acres and a 1/3 interest in the 636 acres to her grandchildren. An appraisal was done in 2006 and for both pieces of land, the appraisal came to 50k. I have this in writing. In 2016, my great uncle decided to buy me out of the 1200 acres and decided to buy 1069 acres for 1900/acre. My personal gross profit comes to around $84,646.00. My question: Can I deduct the original cost basis on this land
(1069 acres x $6.00 = $6414.00) from my capital gain amount of 86,646.00 since this was the original amount of money that was paid for the number of acres I am being bought out ?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,...Yes, this would be correct. Transfers in gift (transfers given without the expectation of anything in exchange) have "carry-over basis."...The original basis of the giver carries over to the receiver of the gift (the land here)....So unless someone passed away and some of this land cane through inheritance (so as to create a step-up in basis - and it doesn't sound as though it does) your basis in the land is, indeed, your great grandfather's purchase price.
Expert:  Lane replied 1 year ago.
I hope this has helped....Please let me know if you have any questions at all....If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the faces or stars on your screen, and then clicking “submit")...JustAnswer will not credit me for the time and work unless you rate me positively....Thank you!Lane……I hold a law degree (JD, Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security/ Medicare, & estate, as well as corporate & tax, since 1986
Expert:  Lane replied 1 year ago.
Hi,...I’m just checking back in to see how things are going...Did my answer help?...Let me know…...Thanks,Lane
Expert:  Lane replied 1 year ago.
Did you see my answer?