Mabel Hudson wrote:

- quote -

I, as the only person to disagree with Ed, modify my
response to agree with Ed.

Phoebe

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Mabel Hudson wrote:
- quote -

That's exactly right. Section 2036(a) of the Internal
Revenue Code says,

"The value of the gross estate shall include the value of
all property to the extent of any interest therein of which
the decedent has at any time made a transfer ... under which
he has retained for his life or for any period not
ascertainable without reference to his death or for any
period which does not in fact end before his death ...

"the possession or enjoyment of, or the right to the income
from, the property,..."

Section 1014(b)(9) says that the basis of any property
received from a decedent is increased to the value at the
date of death,

"if by reason thereof the property is required to be
included in determining the value of the decedent's gross
estate under chapter 11 of subtitle B...."

Stu

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"Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote:
- quote -

Mabel writes,

The information that I have found agrees with Ed. The life
estate does not give any rights to the children until the
Grantor dies, then it is treated as an inheritance, with a
step-up in basis given to the children (Grantees) which is
equal to the value of the property at the time of death of
the Grantee......

I got this information from an Elder Law Attorney in Florida ...

If anyone has a different interpretation, could you please
post it here along with any references ??

This is an item which is similar to a personal situation for
me...

Thank you.

Mabel Hudson, Durant Oklahoma

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Phoebe Roberts, EA wrote:

- quote -

Actually, since she retained a life estate, it would be
includable in the mother's estate and would get a step-up in
basis on her death.

--
Ed Zollars, CPA
Phoenix, Arizona

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Andy in Fink wrote:

- quote -

Grantor has made a gift to her daughters, and is probably
required to file a gift tax return.

- quote -

They have the Grantor's (mother's) basis for calculating
gain (but not necessarily for calculating loss).

The way they structured things isn't the way I would have
structured things, assuming a relatively small estate.

Phoebe

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State is Florida.

A Grantor did a Quit Claim on her home, specifying her two
daughters as Grantees. She retained a Life Estate.

When the Grantor dies, and the two daughters sell the
property, how is the transaction handled with regard to
taxes ?

Thanks,

Andy

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