For Federal Income tax purposes, what is the cost basis of a house inherited under a will?

Question

Is the cost basis the value of the house at the time of death of the testator or is it the original cost?

Answer 1

The cost basis of real estate is the value of the inherited property on the date of death.

Answer 2

There are two possibilities. The first is the value of the house at the time of death of the decendent. The second would be using what is called alternate valuation, which is 6 months after the date of death of the decedent. The only thing is that you have to use either the date of death or the 6 months after for all the assets in the estate. You can't pick date of death for some of the assets, and 6 months after for others. Most estate tax returns use the date of death of the decedent, but I wanted to let you know of the other date that is possible to use.

Answer 3

Value at the time of the death of the testator. If you had gotten it as a gift rather than as an inheritance, then it would be the basis of the giver.

Answer 4

you're suitable on all counts, different than the Fed does not enable it because of the fact it could nonetheless could desire to own loan the government the money they mandatory to function and then lose the added money the tax payer will pay in. yet differently is to alter the tax code and bypass to a flat tax around the board. If we had a flat tax value at of 17 to 22% on all earnings without deductions, they could make greater money than they do now, with the middle earnings human beings wearing the load. The state did not have a state earnings tax as quickly as I lived there in the '80's and with the aid of sales and vacationer tax in hassle-free terms they had most of the terrific roads and colleges, fire and police and reserves than the different state, proving that a state does not choose the earnings tax. merely earlier I moved to Texas, I lived in Kentucky and that they had earnings tax and the comparable sales tax as Texas yet had most of the lesser saved up roads and practically no reserves. This proves that an earnings tax is the lesser area of a sales base.

Answer 5

The fair market value of the house on the date of death. This also applies to anything else inherited, like stock etc.

Answer 6

Tax basis to you is current Fair Market Value at the time you received the house.

Yes, an appraisal would be a very good idea. However, if you are putting it on the market now, then the fair market value would fairly be determined as the final sales price - Because the fair market value is what an unbiased buyer would be willing to actually pay.

Answer 7

Discuss this with a tax expert, most likely, you'll have to have an appraisal.