Question

SALE OF NON-RESIDENTIAL HOME AND GIFT PROPERTY

Forum|Forum|6 years ago
January 3, 2020
2 replies
0 views

My wife's cousin purchased his primary residence in April 2005 for approx. $116,000.00. In September 2011 he added his sister and my wife to the Warranty Deed, In February 2019, he passed away and his sister executed a Quit-Claim Deed making my wife sole owner of the property. What is her basis in the property? She sold the property in September 2019 for $50,000.00. What is our tax liability on this money? Also, he owned three vehicles which were inherited by his sister. She didn't want to be bothered with them so she gifted them to my wife. Two of the vehicles have been sold and we kept the third vehicle for our personal use. What are the tax implications regarding the above vehicles?

S

smarttees

for the vehicles you know the sales prices now you need to figure the basis which is whatever the sister basis was which would be the fair market value on the date of death of her brother because she inherited them

S

smarttees

for the residence your wife has a split basis......1/3 would be a carryover basis because it was a direct gift from your wife's cousin.....the other 2/3 depends on what happened first, the gift or the cousin passing away....if he passed away first then his 1/3 share got a stepped up to fair market value basis as of his death and your wife and the sister took that basis and then the quit claim gift would be a carryover from the sister to your wife and that basis would again be split because the sister's 1/3 was half gift which is a carryover and half inheritance which is fair market value as of the date of death.