BASIS ISSUES
January 8, 2015
Inherited vs Gifted
Why It Matters
Situation• My parents passed away and I now own their home.
• I want to sell it.
• Will I owe taxes?
It Depends
• Was it an inheritance?
• Was it a gift?
Inherited PropertyFMV @ DOD
Example
The Will Names You As Beneficiary
Gifted Property
Lower Of Basis Or FMV
On Date Of Gift
Example
Parents Put The House In Your Name
“Blended” BasisPart Gift, Part Inheritance
Example
50% Ownership Prior To Death
50% After
Summary• Inherited basis is different from
• Gifted basis and also different from
• Blended basis
*** DISCLAIMER ***Taxes suck and there is always another answer. Consult a professional to find out how this information applies to you.
Christopher Farrell, [email protected]
@Goldcocpa