step up in basis
This is not an IRA question but with all the sharp tax minds I am hoping somebody will know the answer:
My uncle died several years ago (single never married). My father was the executor of his estate (one of 3 beneficiaries) and trying to sell my uncles real-estate. My father died on 2/24/2021 and the land was still in the estate for sale.
We just signed a contract to sell the land.
Question is would I (as a beneficiary of my father’s estate) receive step up in value of land as of my father’s date of death or would the step up in value need to be as of when my uncle died several years ago?
Permalink Submitted by Alan - IRA critic on Thu, 2021-04-15 21:31
The basis adjustment occurs as of the DOD of the property owner. It may be problematic now to determine that value if there was no appraisal done within a short period of uncle’s death. Gains since his death would be taxable at the long term cap gain rate any post death depreciation recovered.
Permalink Submitted by Norman Cook on Thu, 2021-04-15 23:44
In TN land must ALWAYS belong to some one. Not the estate. At your uncle’s death the land pasted instantaly to his hirs. The paperwork may have followed some time later, but his heirs would get the step up. At your Fathers death in 2021 the land instantally past to his heirs with a second strep up. So yes, you will have NO capital gain because your stepup cost is the price you sold it for. The selling expenses added to the cost so you had a short term loss equal to the selling expenses and any capital expenses you did to the house after your fathers death.