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Old 10-22-2015, 08:05 AM
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real estate cost basis, multiple owner discount

We are selling our share in a family property to another owner (there are 8 owners). We have the assessment from the estate of the previous owner at the time of her death. A discount was applied to that assessment for tax purposes because of the difficulty of selling when there are multiple owners.

My question is: to figure our cost basis for capital gains purposes, do we also apply the discount, or should we go with the full value?

Second question: There have been minor and major repairs and capital improvements to the property since the death of the previous owner. Can we add our share of ALL repairs and improvements to the cost basis, or only major repairs and capital improvements?

Thanks in advance for any help.



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Old 10-23-2015, 04:42 AM
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Originally Posted by Gatesman View Post
#1;My question is: to figure our cost basis for capital gains purposes, do we also apply the discount, or should we go with the full value?

#2;Second question: There have been minor and major repairs and capital improvements to the property since the death of the previous owner. Can we add our share of ALL repairs and improvements to the cost basis, or only major repairs and capital improvements?

Thanks in advance for any help.
#1;I guess With the full value. special rules apply in determining your cost basis, depending on when the decedent died. In all years, except 2010, the cost basis stepped up to the FMV on the date of the decedent's death; the heir receives a basis in inherited property equal to its date of death value. The step-up basis rule applies to inherited property that's includible in the deceased's gross estate, whether or not a federal estate tax return was filed.



#2;You need to add your share of ALL improvements, NOT repairs, to the cost basis; The only way you can deduct all or part of the cost of home repairs for your residence is if you qualify for the home office deduction or rent out part of the home.So as far as taxes are concerned, repairs to a personal residence are meaningless.



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Old 10-23-2015, 09:46 AM
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Thanks for the quick response!



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Old 10-23-2015, 09:51 AM
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Originally Posted by Gatesman View Post
Thanks for the quick response!
No probleml; good luck~



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