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Post by ksguy on Mar 1, 2011 16:18:17 GMT -5
MIL passed away 2/2010 and left condo she had owned & lived in for previous 6 years to her 4 kids via Transfer on Death. Condo was paid for. MIL paid 68k for unit. Do the kids get stepped up basis to FMV as of date of death for tax purposes? The condo was sold 11/2010 for 78k to a third party, so each gets 1/4 of the FMV as basis if stepped up basis is allowed? No appraisal was done to save costs. Can one make the point that FMV at death would have been 78k since that was selling price 9 months later.
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mwcpa
Senior Member
Joined: Jan 7, 2011 6:35:43 GMT -5
Posts: 2,425
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Post by mwcpa on Mar 1, 2011 16:38:54 GMT -5
in 2010 there was no step up in basis, there was a modified step up in basis.
in December 2010 Congress changed the law and allowed for a full step up at the discretion of the executor/rix, not the beneficiaries, by opting into the estate tax.
in the case while you could take the position that the FMV was equal to selling price such could be challenged by IRS and without any form of appraisal you could have an issue. why not get the real estate broker who is handling the sale give you a quick down and dirty appraisal so you have it on file.
do not forget, the net proceeds is not the FMV, the FMV is the selling price... if the cost and the selling price are the same, then in all likelihood there is a possible capital loss related to closing and selling costs.
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