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My great aunt died in Oct 2009 and left a property to my mother and her siblings. In April 2011, my mother transferred ownership of her portion, to my sister and I via a warranty deed. We as a group, sold the property this past June. I rec'd a 1099-S at the time of closing showing what my portion was. In regards to taxes, what do I need to do? I read about Capital Gains and that it is usually the fair market value at the time of death-- but I didn't directly inherit the property? If I do need to find out the FMV, how do I do that? Is the towns assessed value good enough and if so, from what year? 2009 or 2011? This was a vacation home in NH. No one lived there. It was rented out from time to time. Thank you.
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Tax Professional Answers
John Stancil
Your mother didn't do you any favors by deeding the property to you. As such it is considered a gift, and your basis is a transferred basis from her. In this case the transferred basis is the fair market value as of the date she inherited it from your great aunt. Most likely you can search court house records to determine the approximate fair value at the time. A Realtor or appraiser may be able to help you out. You will need to reduce the value by any depreciation allowed or allowable when it was a rental property. You must reduce the basis for any depreciation that was or should have been taken regardless of if it was taken.
The assessed value as of the date of the aunt's death could be used, but that is likely a low-ball figure and not representative of the FMV. If there was a gain on the sale, a portion would be depreciation recapture, taxed at regular income tax rates. Any gain above the depreciation allowed would be taxed at the capital gain rate.
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398 weeks ago
The assessed value as of the date of the aunt's death could be used, but that is likely a low-ball figure and not representative of the FMV. If there was a gain on the sale, a portion would be depreciation recapture, taxed at regular income tax rates. Any gain above the depreciation allowed would be taxed at the capital gain rate.
Question Owner
How do i prove the FMV to the IRS? What documentation is required?
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398 weeks ago
John Stancil
Your mother didn't do you any favors by deeding the property to you. As such it is considered a gift, and your basis is a transferred basis from her. In this case the transferred basis is the fair market value as of the date she inherited it from your great aunt. Most likely you can search court house records to determine the approximate fair value at the time. A Realtor or appraiser may be able to help you out. You will need to reduce the value by any depreciation allowed or allowable when it was a rental property. You must reduce the basis for any depreciation that was or should have been taken regardless of if it was taken.
The assessed value as of the date of the aunt's death could be used, but that is likely a low-ball figure and not representative of the FMV. If there was a gain on the sale, a portion would be depreciation recapture, taxed at regular income tax rates. Any gain above the depreciation allowed would be taxed at the capital gain rate.
Leave a Comment
398 weeks ago
The assessed value as of the date of the aunt's death could be used, but that is likely a low-ball figure and not representative of the FMV. If there was a gain on the sale, a portion would be depreciation recapture, taxed at regular income tax rates. Any gain above the depreciation allowed would be taxed at the capital gain rate.