[various from March 2008 thread]

- quote -

A little over a year later, anyone care to offer any updates?

-Mark Bole

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"removeps-groups[at]yahoo.com" <removeps-groups[at]yahoo.com> wrote:
- quote -

Sorry, that's wrong. The statute of limitations never starts to run on
a tax return that is not filed.

- quote -

You have misunderstood the artile. In any case, the article deals with
income tax, not gift tax returns.

- quote -

If there was no gift tax or estate tax due (including the value of the
gift in the estate) then it's probably ok. That wouldn't change the
basis rule, though.

Stu

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In article <fqfmlb$831$1[at]reader2.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:
- quote -


The law as it is now, and I agree it will almost surely
change, allows step up for the first $1 million of assets,
and the executor gets to pick which assets get the step up.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Dick Adams wrote:

- quote -

I am packing for a trip, so can't research this too much, but I
understood the downside to the 2010 repeal is all stepped up basis is
lost. I'm sure someone will have a well documented answer before my
return. But the 2010 was not the free lunch it appeared to be.
JOE

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removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:
- quote -

As it sits now, the answer is probably yes, but
Congress may change that.

Those who thought taxation without representation
was tyranny ought to see what it is like with
representation,

Dick

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On Mar 2, 5:19�pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

Did the parents live in their house - after the gift - until they
died? They may have created an "incomplete gift" and their heirs
should look further into this. It may have income tax consequences to
the heirs.

========================================= MODERATOR'S COMMENT:
Please trim away all extra text before posting!!!

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 2, 5:13 am, knarc <kn...[at]somwhere.net> wrote:

- quote -

I think the statute of limitations is 10 years, so the IRS cannot come
after your parents or estate for not filing a gift tax return. But
I'm not totally sure about this statement. See
http://www.wwwebtax.com/audits/statu...imitations.htm. In any
case, I think that 10 years ago the lifetime gift exemption was about
600k, so quite possible that may have been no gift tax due anyway,
just a gift return.

- quote -

I see the purchase of a house for $1 as a gift, and since it was made
while your parents were alive, your basis for the house is their basis
if their basis is less than 100k. However, if they bought the house
for more than 100k, like 150k and its price decreased and its FMV was
100k at the time of the gift, then the basis of the house is 100k.

Did the title of the house really change 10 years ago? If yes, then
the above paragraph seems right to me.

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On Mar 2, 2:19 pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:

- quote -

Out of curiosity, when the estate tax is repealed in 2010, would we
still have this step-up of basis?

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Harlan Lunsford wrote:

- quote -

Basis is passed along with a gift (unless FMV dropped, you can't pass
along a built-in loss). Only death (that I know of) can create a step up
in basis. Which is why the "give the house to the kids for a buck" route
is usually the wrong way to go. The kids could have chipped in to pay
for an irrevocable trust, which would have provided some protection, and
allowed the step up upon death.
JOE
www.blog.joetaxpayer.com

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knarc wrote:
- quote -

You may disagree with that other tax preparer in good conscience, too.

ChEAr$,
Harlan Lunsford, EA n LA

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Dick Adams wrote:
- quote -


Property was sold to 3 siblings for $1 approximately 10 years ago. You
are correct that no gift tax return was filed. Parents are now
deceased. Property was not used as a residence by any of the siblings,
nor was it rented. A child of one of the siblings was using it as a
residence rent free but paying all of the expenses. That child has now
purchased the property from the 3 siblings at a near market rate and I
am attempting to determine the basis for this sale.

I thought pub 551 was fairly clear that in the situation where a
property was acquired by gift and at the time the FMV exceeded the
donor's basis that the donor's basis was passed to the recipient of the
gift.

However, one of the siblings has a tax preparer telling them that the
basis should be the FMV on the date of the gift. I don't agree and my
client (a different sibling) obviously wants to use the FMV suggested by
the other preparer.

Knarc

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In article <fqdfec$aej$1[at]reader2.panix.com> ,
Dick Adams <rdadams[at]panix.com> wrote:
- quote -


First we should clarify what makes something a gift.


The difference between FMV and the $1 paid makes this a gift.

That's true even if the parents neglect to file a ift
tax declaration.

Assuming the property has appreciated since the parents
acquired it, their basis becomes the child's basis and their
acquisition date is child's date.


If the FMV as actually lower than parent's basis, the
property will carry along a dual basis until sold.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Knarc <someone[at]somewhere.net> wrote:

- quote -

It is quite obviously a gift. But an IRS auditor would
almost certainly put your basis at $1 because that is
what you paid for it and then go after your parents for
not filing a gift tax return.

Why not just a straight gift? Why not but it from them,
make monthly payments, and have them forgive the principle
one year at a time?

Dick

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Would the purchase of a residential property for $1 from parents be
considered a gift? The property had a FMV on that date of ~$100K. So
would the basis of the purchaser be the basis of the donor (i.e. parents)?

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