Q: Cost basis? =====>since the FMV of the farm of $200K is higher than its original cost in 1953, the basis of the farm is the FMV of 1953.
What would constitute step up?=======> The rules as to basis in the case of a gift do not allow for a stepped-up calculation and they depend upon whether the basis is being calculated for purposes of gain or loss. For determining gain, the basis is the same as it would have been in the hands of the donor and is called a "carryover" basis. In the above example, the c/o basis of the farm I mean the original cost of the farm is its FMV in 1953.
What can we do to get the highest cost basis possible?======>>as said you can not get the highest cost basis possible sicne your basis of the farm is its FMV in 1953.
Q: Tax requirements? ====>You need topay tax on the LTCG ; Capital gains taxes are due when a capital asset is sold for a gain. Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2017, the maximum capital gains rate for most people is 15%. For lower-income individuals, the rate may be 0% on some or all of the net capital gain.
State the farm is in and siblings requirements that live in other states? ========>they also need to pay tax to IRS/home state or local taxing jurisdiction on their LTCG as mentioned above.
for state taxes they need to contact their hoe stATE's dept of revenue for help
Q: Thinking Capital Gains will be big.... can you advise as to what to expect?====>as mentioned above; Long-term capital gains are taxed at more favorable rates than ordinary income. The current long-term capital gains tax rates are 0%, 15%, and 20%, while the rates for ordinary income range from 10% to 39.6%. However, big changes could be coming to the tax brackets in 2017, and your long-term capital gains tax rate could be affected. Here's what you need to know about the current capital gains tax structure, and what could change for 2017.
Q: Can you recommend websites so I may get smarter on our situation? Obviously less tax bill the more better...(I know.... this is a great problem to have...)
thanks=======> I guess the best way is to contact an IRS enrolled Agent / a CPA doing taxes in your local area for professional help.
You may visit this web site for reference; Determining Cost Basis Of Gifted Property