Bill Brown wrote:

- quote -

Agreed. I was expecting to see the suggestion of the conversion to Roth
of some IRA assets of the soon to meet his maker.

Joe

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On Jan 16, 12:02*pm, " Jon Gallo" <jga...[at]galloconsulting.com> wrote:
- quote -


Except for a $3,000 deduction against ordinary income, it doesn't make
a difference unless the decedent-to-be has capital gains that can be
offset by the realized capital loss.

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"Jon Gallo" <jgallo[at]galloconsulting.com> wrote in message
news:496e1446$0$2845$ae266db1[at]news.tbmnewsfeeds.com...
- quote -

carry over to an estate. I was simply trying to point out that
it is advisable for the decedent-to-be to recognize losses
in the year of death attributable to assets with a current fair market
value less than basis, since the step-down in basis at death wipes out THAT
loss.

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In article
<feaf9ef1-131f-412b-8ef7-d92c698ddfab[at]k36g2000pri.googlegroups.com> ,
Herb Smith <smithff33[at]aol.com> wrote:

- quote -

Suppose the carryover (carry forward) losses are (or were) in the past
tax returns for a married couple who have been filing jointly for a
number of years; and one spouse dies.

Is the entire carry-forward lost? Or only half?

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On Jan 15, 2:55*am, Herb Smith <smithf...[at]aol.com> wrote:
- quote -


Thanks for clearing all that up.

Tom Young

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On Jan 14, 8:05�pm, TomYoung <tgyo...[at]yahoo.com> wrote:
- quote -

No, that is the wrong conclusion. Unused CL carryovers on the
decedent's final return are GONE. They do not flow to the estate, and
all assets transfer at their current FMV (no gain or loss).

- quote -

Similar, but only with respect to capital losses generated after the
DOD.
There are no carryover losses from the decedent.

- quote -

Similar, but read the form 1041 instructions and review the form. It
might be better, taxwise, to distribute the gains and/or dividends to
the beneficiaries via form K-1, rather than having the estate pay the
tax.

- quote -

Once again, THERE ARE NO CARRYOVER LOSSES FROM THE DECEDENT IN THE
ESTATE, so no need to keep an estate open hoping for "recovery".
Unused losses in the decedent's account are gone forever.

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On Jan 13, 8:28�pm, Bill Brown <brow...[at]longwood.edu> wrote:
- quote -

and only if the gross estate exceeds the current exclusion value
($3.5M in 2009).

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TomYoung wrote:
- quote -

this newsgroup as well as my comments to Jon Gallo's post.

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On Jan 14, 10:44*am, "Jon Gallo" <jga...[at]galloconsulting.com> wrote:

- quote -

Could you (or somebody else) expand upon this a little bit?

This suggests to me that any non-deductible Capital Loss in the
decedent's final tax return *can* be used by in subsequent estate
income tax returns. Yes?

Are the capital gain/loss rules in estate income tax returns roughly
the same as those for the 1040? That is, carried forward capital
losses can be offset against net capital gains? And some portion of
unused capital losses can offset ordinary income?

How about capital gains/qualifying dividend tax rates in estate income
tax returns? More or less the same as the rates applied in a 1040?

Finally, how long can you keep an estate "alive" for tax return
purposes? With the market in the toilet and not a lot of prospects
for it to come roaring back in the next few years I would imagine it
could take years and years to use up a capital loss carryforward.

TIA.

Tom Young

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

Dan Lanciani wrote:
- quote -


Property Received as a Gift

To figure the basis of property you receive as a gift, you must
know its adjusted basis (defined earlier) to the donor just
before it was given to you, its FMV at the time it was given to
you, and any gift tax paid on it.

FMV Less Than Donor's Adjusted Basis

If the FMV of the property at the time of the gift is less than
the donor's adjusted basis, your basis depends on whether you
have a gain or a loss when you dispose of the property. Your
basis for figuring gain is the same as the donor's adjusted basis
plus or minus any required adjustment to basis while you held the
property. Your basis for figuring loss is its FMV when you
received the gift plus or minus any required adjustment to basis
while you held the property (see Adjusted Basis, earlier).

If you use the donor's adjusted basis for figuring a gain and get
a loss, and then use the FMV for figuring a loss and have a gain,
you have neither gain nor loss on the sale or disposition of the
property.

Example.

You received an acre of land as a gift. At the time of the gift,
the land had an FMV of $8,000. The donor's adjusted basis was
$10,000. After you received the land, no events occurred to
increase or decrease your basis. If you sell the land for
$12,000, you will have a $2,000 gain because you must use the
donor's adjusted basis ($10,000) at the time of the gift as your
basis to figure gain. If you sell the land for $7,000, you will
have a $1,000 loss because you must use the FMV ($8,000) at the
time of the gift as your basis to figure a loss.

If the sales price is between $8,000 and $10,000, you have
neither gain nor loss. For instance, if the sales price was
$9,000 and you tried to figure a gain using the donor's adjusted
basis ($10,000), you would get a $1,000 loss. If you then tried
to figure a loss using the FMV ($8,000), you would get a $1,000 gain.

--
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In article <Xns9B93937C2FA8Dspamtraplexregiacom[at]130.133.1.4> , spamtrap[at]lexregia.com (Stuart A. Bronstein) writes:
| Alan <sfcnm-mtm[at]yahoo.com> wrote:
|
| > Your last sentence implies that the decedent's estate will have
| > capital losses from the sale of assets before death. Any capital
| > losses that could not be used (excess loss beyond $3000) on the
| > final income tax return of the decedent is lost forever.
|
| Does that mean it would be better for the elderly, while they are still
| alive, to give away property with a value lower than their basis? The
| basis would be transferred to the donnee, who would then be able to get
| the benefit of the loss (well, eventually) if they sold.

I thought that a gift whose basis in the hands of the donor was greater
than the FMV at the time of the gift acquired a dual basis in the hands
of the donnee such that while the donnee would not be penalized on a
phantom gain is he sold for more than that FMV (but less than the donor's
basis) neither would he be able to take a loss in that same range.

Dan Lanciani
ddl[at]danlan.*com

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Alan <sfcnm-mtm[at]yahoo.com> wrote:

- quote -

Does that mean it would be better for the elderly, while they are still
alive, to give away property with a value lower than their basis? The
basis would be transferred to the donnee, who would then be able to get
the benefit of the loss (well, eventually) if they sold.

Stu

--
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Jon Gallo wrote:
- quote -

capital losses from the sale of assets before death. Any capital
losses that could not be used (excess loss beyond $3000) on the
final income tax return of the decedent is lost forever.

--
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"Alan" <sfcnm-mtm[at]yahoo.com> wrote in message
news:ARQal.8844$pr6.5838[at]flpi149.ffdc.sbc.com...
- quote -

In the current economy, our T&E department is advising families that consult
us
concerning a terminally ill relative to sell all stocks in which the
decedent-to-be
has a loss. Otherwise, the step down in basis will wipe out the ability of
the
estate to recognize that loss for income tax purposes.

Jon Gallo, Los Angeles

--
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On Jan 12, 6:56*pm, Alan <sfcnm-...[at]yahoo.com> wrote:

....

- quote -

The alternate valuation date can be elected if and only if (1) the
value of the taxable estate is decreased and (2) the estate tax
liability is decreased.

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Stuart A. Bronstein wrote:
- quote -

....as long as at least half of the value of the community property
interest was includable in the gross estate of the decedent, right?
(according to Pub 551)

But step-down can apply here also. Suppose married couple M and N own
personal-use community property with basis of $100K, it drops to $80K
FMV overnight, resulting in N dropping dead from a heart attack, and M
inherits N's half. Then the market partially recovers, FMV rises to
$90K and M sells the property for that amount. Now M has $10K capital
gain instead of what would normally have been a $10K non-deductible
personal loss.

-Mark Bole

--
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Harlan Lunsford <lunstax[at]bellsouth.net> wrote:
- quote -

I suppose you could say there is, and it's called community property.
When a spouse dies owning community property, the entire value gets
stepped up, not just the half owned by the spouse who died.

Stu

--
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"Harlan Lunsford" <lunstax[at]bellsouth.net> wrote
- quote -




Well, country folks get to "two-step", recovering alcoholics get to "twelve
step"......why can't heirs get to "side step"?







--
Paul A. Thomas, CPA
Watkinsville, Georgia

--
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ed wrote:

- quote -

Too bad there's no such thing as 'side step' basis. Although... with a
little creativity...... (lol)

ChEAr$,
Harlan Lunsford, EA n LA

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On Jan 12, 8:12*pm, Mark Bole <ma...[at]pacbell.net> wrote:
- quote -

Market value at DOD does not consider original cost, so step down may
occur.

ed

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