- quote -

No, I'm not saying that at all. First of all, the IRS does
not establish the basis of your home. YOU determine the
basis, but you have to be able to convince the IRS, if they
ask, that the basis you report when you sell the home is
correct, and was determined in keeping with the applicable
laws and regulations. If you inherited the home, an
appraisal as of the date of death would be very convincing
evidence.

Your basis isn't changed by the passage of time. When you
sell the home, it doesn't matter whether you inherited it 10
years ago, 15 years ago, or 30 years ago. Your basis is
whatever the fair market value was on the date of death of
the person you inherited it from. It's not the "last
appraised value." It's the appraised value on the date of
death, no matter how long ago that was, and no matter how
many other appraisals might be done before or after that
date.

Bob Sandler

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Will wrote:
....
- quote -

I think in any case where there was an estate return required, the value
therein controls. If no return filed, one still would presume there
would have had to been an evaluation made to ensure the total value of
the estate was below that limit.

- quote -

It seems to me that it mostly falls on the other side of the transaction
to establish a value at TOD of the previous owner for estate purposes;
which value would carry over.

--

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

In article <DJWdnY9jtdfo5k_VnZ2dnUVZ_vGdnZ2d[at]giganews.com> ,
Will <westes-usc[at]noemail.nospam> wrote:
- quote -

I doubt it. Rather, you need an appraisal *as of the date of death*.
Getting one shortly thereafter is best, but an appraiser ought to be
able to do a retrospective "as of" appraisal.

Seth

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Bob Sandler" <bob_usenet[at]yahoo.com> wrote in message
news:njl0d4575cb1eku03tktgm2pqg3emig48b[at]4ax.com...
- quote -

Bob, are you saying that the IRS would establish a basis for an inherited
home by looking at the last appraised value of the home, even if that
appraisal is 10 or 15 years old?

--
Will

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"dpb" <none[at]non.net> wrote in message news:gapacn$8fi$1[at]aioe.org...
- quote -

The above was three alternative rules, and the level of generality you
choose might depend on how many home sales each rule shows in your specific
case:

1) Establish new cost basis of home based on comparable homes in the same
city
2) Establish new cost basis of home based on comparable homes in the same
region
3) Establish new cost basis of home based on comparable homes within some
finite radius

If the IRS has no standard for this at all, then it looks like a very
subjective process. If you had an assessment done that would probably be
accepted, but in absence of an assessment, it looks like each auditor will
in effect make up their own rules about what constitutes an acceptable cost
basis.

In the case of an inheritance, I assume the taxpayer's incentive would be to
build a case for the highest possible appraised value, in order to raise
cost basis as high as possible?

--
Will

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

D. Stussy wrote:

- quote -

Let me re-phrase that: the IRS instructions for Schedule D tell you to
attach an explanation if you don't use actual cost. However the IRS
won't automatically reject your return if you do not follow this
instruction.

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Mark Bole" <makbo[at]pacbell.net> wrote in message
news:7rZzk.753$yr3.344[at]nlpi068.nbdc.sbc.com...
- quote -

No, you don't.

You only have to prove basis if you're audited.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Bob Sandler wrote:

- quote -


- quote -


It's always potentially subject to dispute, or until the statute of
limitations runs out, whichever comes first.



- quote -


- quote -


But better than Zillow, no?

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Bob Sandler wrote:
- quote -

And you have to attach a statement to your Schedule D explaining your
basis if it is not cost.

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"123go" wrote:
- quote -

analyses

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Will wrote:
....
- quote -

Don't see how that could be a general rule--in my case that would be an
average of 1.

--

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"D. Stussy" <spam[at]bde-arc.ampr.org> wrote in message
news:gap3rm$75v$1[at]snarked.org...
- quote -

and marketing analysises (wow, what is the plural of analysis?) don't just
give a suggested asking price. At least, not in my experience.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

- quote -

No. You get what you pay for. A marketing analysis from a
real estate agent is not nearly as thorough, detailed,
precise, and authoritative as an appraisal. It's basically
the agent's best guess, and is probably colored by what he
thinks he has to tell you to get you to list the house with
him. And, as D. Stussy pointed out, you have to make sure
you know whether the agent is giving you the price he thinks
it will sell for or the price he thinks you should list it
at. The listing price or asking price is of very little help
in determining fair market value.

Bob Sandler

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

- quote -

No, the IRS doesn't have standards like that. Here is what
the IRS has to say in Publication 523 (pages 7 & 8).

"Fair market value is the price at which property would
change hands between a willing buyer and a willing seller,
neither having to buy or sell, and both having reasonable
knowledge of all necessary facts. Sales of similar property,
on or about the same date, may be helpful in figuring the
fair market value of the property."

"Home received as inheritance. If you inherited your home,
your basis is its fair market value on the date of the
decedent’s death or the later alternate valuation date if
that date was chosen by the personal representative for the
estate. If an estate tax return was filed, the value listed
for the property generally is your basis. If a federal
estate tax return did not have to be filed, your basis in
the home is the same as its appraised value at the date of
death for purposes of state inheritance or transmission
taxes."

Bob Sandler

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"123go" <rejecto[at]rejcet.ccc> wrote in message
news:cIOzk.222254$102.149930[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Asking price isn't necessary market price.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:8vOdnZ9kXecLPVLVnZ2dnUVZ_rjinZ2d[at]comcast.com...
- quote -

I'll tell you how: I happen to live in a neighborhood where the turnover is
low - usually when people die, although some move. Out of the 1,000 houses
that are in my "immediate area," only about 25 change hands in a given year.
As for my 4 immediate neighbors: Two are original owners from 1948, one
changed hands from the original owner only last year, and the 4th was bought
in 1980. I inherited my property in 1990, and my parents bought in the
early 1950's (as second owners). In 2006, a house a block away within 2% of
both lot size and house square-footage of mine sold for $1.95M, and my new
neighbors bought for $1.5M. Zillow had most houses in the area listed for
$1.1-1.3M; an error that at the lowest exceeds $200k (16%, and in the
extremes, up to $800k, or 60%).

Meanwhile, one of my friends lived in a higher turnover neighborhood where
houses are at or below the median price. About 10 houses (minimum) every
month within a mile change hands. Zillow's prices appear to be relatively
accurate there. Houses seem to change hands at about the same value as
Zillow lists them for.

Note that I am in California - where property tax assessed value has nothing
to do with current market value.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"Bob Sandler" <bob_usenet[at]yahoo.com> wrote in message
news:bdhuc417htcq8gv2r8l6e3iemm656resq8[at]4ax.com...
- quote -

would a "free marketing analysis" form a real estate agent suffice?

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
newsNudnfWaM6gZX1PVnZ2dnUVZ_u2dnZ2d[at]comcast.com...
- quote -

Does the IRS have some kind of official standard or guideline for what will
constitute an acceptable cost basis? For example, is the standard to take
the average of similar selling homes in the same city / same region / within
two miles of home location, etc?

--
Will

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

D. Stussy wrote:

- quote -

I withdraw my initial reply. I was too focused on the thought that there
were 'developments' like Levittown Long Island, where entire
neighborhoods were so homogeneous that one can actually know the going
rate, give or take.

I'd suggest that "for the couple hundred bucks (last refince, I saw it
cost $250), it's worth getting a paid for, professional appraisal" is
the best route.

D - I agree with your hesitation regarding Zillow, but not your premise.
I don't know how it's possible for a sufficiently large neighborhood to
defy the numbers of average turnover. Certainly possible for a 4 house
cul-de-sac, but not a larger area.

Joe
www.blog.joetaxpayer.com

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
newsNudnfWaM6gZX1PVnZ2dnUVZ_u2dnZ2d[at]comcast.com...
- quote -

Careful about Zillow. It has been known to be really WRONG for some areas,
especially in areas where the housing turnover is low. If the neighborhood
in question has an average ownership turnover of 5 years, then the site may
get close. However, in neighborhoods where ownership lasts 20-30 years on
average and thus low turnover, the site is often wrong.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >