remainderman wrote:

- quote -

If the step-mother depreciated the property, she then
treated it as her own - and therefore the childrens' basis
is as of her date of death, unless you are trying to take
the position that she had no right to such a deduction. If
ownership had passed to the children upon the father's
death, then THEY should have taken depreciation during the
rental period. It's probably to your clients' advantage to
say at the life estate caused a marital interest that
delayed actual inheritance until the step-mother died. If
this was supposed to be in a "bypass trust," then something
is wrong.

The amount of depreciation taken by the step-mother does not
matter. It gets wiped out anyway by the subsequent
inheritance [IRC 1015?]. What matters is whether she
rightfully depreciated it.

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Home in FL.
Father died, left home to his son and daughter (50-50).
They are the remaindermen.

Step mother was left with life interest.

Step mother lived in home 4 years, then had to move on to
assisted living facility and eventually nursing home.
Rents, of course went to help step mom. Stepmom died.

Renters immediately left.

House cleaned up and sold within three months.

Question 1: What is the basis of the home for the son and
daughter? Is it the value of the house on the date of their
father's death, or does the life estate to the step mother
matter?

Question 2: If we have to do an actuarial calculation,
then the step mother was 72 when the father died. So, IRS
tables say step mom's life estate was worth 57%, while
remainderman's share was 43%. Given this information, is
the basis of the home its FMV times .43?????

Question 3: Does it matter that the home was a rental for
the last years of the step mom's life?

Question 4: We, the son and daughter have no idea whether
the step mom depreciated the property, or at what rate.
Hope we don't need this data. If we do, how to get it?

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