Compare Mortgage Quotes

goodtwin · Joined: 15 Mar 2010 Posts: 1 1.34 Dollars($)

My father passed away in 1996. He bequeathed his home to me, subject to the right of his wife to reside in the home as long as it was used it as her primary residence or until she should remarry (life estate), after which I would be allowed to sell the property. After becoming unable to live by herself, his wife executed a quitclaim deed in 2009, transferring the interest to me. I sold the property shortly thereafter. Would the basis for determining the gain/loss be the fair market value at the time of my father's death or the FMV at the time the quitclaim deed was executed?

jenkin7 · Posted: Mon Mar 15, 2010 11:47 pm Post subject:

Hi goodtwin,

Since you inherited the property you will have a stepped up basis while determining the capital gains or loss. This means that the fair market value (FMV) of the property at the time of your father's death will be taken into account when the capital gains or loss is calculated for tax purpose. The fact that his wife had a life estate on the property will not affect this basis because she has already given up her property rights and no longer uses the home as her principal residence.

Company	Loan Type	APR	Est. Pmt.
				Go
				Go
				Go
				Go
				Go
				Go

Property State:
Property Type:
Credit Rating:

All times are GMT - 7 Hours

Page 1 of 1

Compare Mortgage Quotes

What is my basis for determining FMV on inherited property when a life estate was involved?