"KSB" <nospam[at]nospam.net> wrote:

- quote -

It's the mother's basis less the percentage value of a life
estate based on the mother's age. IRS tables in the
regulations give you the value.

- quote -

The mother's basis depends on many things. Was she a
co-owner with your father before he died? If no, it is the
market value at the date of his death.

If they owned it together, was the house community property?
If so, it's also the market value on the date of his death.

If not, it's probably half the amount your parents paid for
the place plus half the value at your father's death.

- quote -

That's not a basis issue, it's a tax issue and has nothing
to do with this question.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

My wife owns a house that was gifted (transferred) to her by
her mother, with her mother retaining a life interest so she
could remain in the house.

It has become necessary to sell the house, as my wife's
mother now needs to go to assisted living (she can't handle
the house)

Question.

What is the tax basis?

Is it the original cost of the house when purchased plus
improvements?

Is it the value of the house when transferred (which
includes a $250,000 step up resulting from my father in laws
death)?

Does the basis include the full $500,000 step up my mother
in law would be entitled to if she sold the house before
transfer?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >