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Old 06-14-2016, 11:07 PM
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death of rental property owner..........

When my mom dies, her rental property home will be mine. I'm afraid that the capital gains taxes will be high. She has owned the house for about 25 yrs and probably taken depreciation on it (I understand that doesnt matter if you took it or not- that if she sold, it had to be added to the sale price per IRS). I believe the basis of the house will be the value at her death, but will the IRS forgive those depreciation amounts when figuring capital gains for say me, the new owner?



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Old 06-15-2016, 04:05 AM
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Originally Posted by burrpenick View Post
When my mom dies, her rental property home will be mine. I'm afraid that the capital gains taxes will be high. She has owned the house for about 25 yrs and probably taken depreciation on it (I understand that doesnt matter if you took it or not- that if she sold, it had to be added to the sale price per IRS). I believe the basis of the house will be the value at her death, but will the IRS forgive those depreciation amounts when figuring capital gains for say me, the new owner?
YOUr(as a heir), basis ,for depreciation is the FMV as of date of MOTHER;s death or the alternate valuation date if that value was used on the decedent's estate tax return. So a question that you may raise is: What happens to the accumulated depreciation of the rental pty owned by your mom;as said, Internal Revenue Code states that you will receive a step-up in basis of the FMV at the time of death. The accumulated depreciation prior to mothr's death is irrelevant. Once the property has been inherited, the depreciation schedule would begin based on the new FMV as you said.



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