rshap2l[at]yahoo.com (John Smith) wrote:

- quote -

Interesting issue. One question: does the decedent's family
get par value plus 90%, or 90% including par value?

Assuming it's the latter, my guess is that the value for
estate tax purposes would be 90% of the fair market value on
the date of death. If the sale occurs later, there would
also be a capital gain to the extent the sale proceeds to
which the family is entitled to exceed the estate tax value.

Stu

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Not sure how to treat this scenario tax wise. Its in New
York City.

Decedant dies leaving a cooperative apartment which was his
residence for the last 10 years. The Cooperative Board holds
an option which they always exercise to purchase the shares
at par value from the Estate. The Board then sells the coop
and is contractually obligated to deliver 90% of the
proceeds to the estate.

Decedant paid $60K for the apartment in 1993. Par value is
something like $1000. Say the proceeds returned to the
estate after the sale is $120K. Assume a stable real estate
market.

How is this transaction taxed. Does it matter if the shares
are sold back to the board at par value more than 6 months
after death? Does is matter if the Board sells the shares
more than 6 months after death? Does it matter if the two
transactions don't occur in the same calandar year?

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