Stuart Bronstein wrote:

- quote -

That was my first guess, as well. My second guess was ~
$7,086.

But I finally looked it up and found the answer at Reg.
1.1015-4(a)(1). GREATER of donor basis or donee payment.

MTW

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"Seth Breidbart" <sethb[at]panix.com> wrote
- quote -

I don't think she paid $100K to her father; I read it as
$100!! Thus, in reality her father "sold" it to her for
significantly less than FMV. To that extent he made a gift
to HER. Thus his basis DOES figure into it. But rather
than her basis being exactly the same as his ($7,000), I
think that it would be $7,086. That is figured by taking
the $100 she paid PLUS (49,900/50,000)7,000. (Because
49,900/50,000 of it was a gift and so she gets carryover
basis of that percentage of his basis.)

Vida Freeman, EA

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Herb Smith <smithff33[at]aol.com> wrote:
- quote -

If she paid $100K to her father for a house worth $50K, I'd
say that her basis is $50K and the other $50K was a gift to
her father.

Seth

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MTW wrote:
- quote -

Oh, not the sum of the two? That would have been my guess.

Stu

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Michelle Kapp wrote:

- quote -

Good. I don't think sex-change operations are deductible
any more.

Stu

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- quote -

I agree. What I've done in similar situations is to set the
gift up as an installment sale with payments due only
annually. When the payment is made, the check is returned
by the parent with a note basically gifting the payment back
to the child.

The drawback is that, while the child shouldn't have
cancellation of indebtedness income, the parent will have
phantom interest income. It doesn't always have to add up
to a significant amount, though.

Stu

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Steve, working on Michelle's computer. Thanks

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Arthur L. Rubin wrote:
- quote -

who got "his" gender "trans"migrrated. (grin)

ChEAr$,
Harlan Lunsford, EA n LA
Tue, 9 Nov 2004 17:59:27

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Herb Smith wrote:
- quote -

OOps! Herb, look again. OP said the taxpayer bought the
house from her father for 100 in 1970.!

This puts me in mind of a client long ago who's father
"sold" him his house for $1. It was a formality to be
sure. People do this, recording 1$ or 100$ in the public
records to hide the real "consideration".

Now then; IF the OP really mean 100,000$, then disregard
the above.

ChEAr$,
Harlan Lunsford, EA n LA

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Michelle Kapp wrote:

- quote -

Since this looks like a "part sale, part gift" transaction,
I believe her basis would be the greater of the donor's
basis or the amount of consideration she paid. Ergo: $7,000
(assuming that was the father's basis at the time of the
gift).

MTW

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ichelle Kapp wrote:

- quote -

Effectively, the father gifted the home to his daughter
($49,900 gift). As such, the father's cost basis in the
home at the time of the gift transferred to the daughter
($7000 plus any capital improvements made by the father).
The adjusted cost basis in the hands of the daughter is
usually the preceding plus any improvements made by the
daughter.

--
Alan
http://taxtopics.net

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- quote -

I will disagree with the other answers. If she "bought" a
house worth $50,000 from her father for $100, that wasn't
really a purchase - it was a gift. I would use $7,000 as
the basis (or maybe $7,100?)

--
Don EA in Upstate NY

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Michelle Kapp <smfwdf[at]comcast.net> wrote:

- quote -

I would say that makes it essentially a gift. Her father
should have filed the appropriate forms.

- quote -

If it's a gift, I think she uses her father's basis (plus
all appropriate adjustments).

Seth

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Michelle Kapp wrote:

- quote -

$7,000, or possibly $100 + $6900 x 499/500 = $7,086.20.

- quote -

Who are you? Steve or Michelle? <G
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"Michelle Kapp" <smfwdf[at]comcast.net> wrote

- quote -

Looks like a gift, the gift basis would be $7,000, or
whatever the fathers basis was when the gift was made.

--
Paul A. Thomas, CPA
Athens, Georgia
taxman at negia.net

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"Michelle Kapp" <smfwdf[at]comcast.net> wrote:

- quote -

Since she bought the house from her father, his basis is
irrelevant. Her basis is her purchase price ($100k) PLUS any
improvements made in the last 34 years. In that period of
time, furnace, hot water heater, roof replacement,
electrical upgrade, etc are all possible. Nothing lasts
forever.

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"Michelle Kapp" <smfwdf[at]comcast.net> wrote:

- quote -

Her basis would be what she paid for it.

Wayne Brasch, CPA, M. S. Taxation

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Single individual selling personal residence for over
500,000. She bought the house from her father for 100 in
1970. the house at that time was worth $50,000. The father
had originally purchased for 7,000. What is the original
basis the daughter uses? 100? Thank you, Steve

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