Discussion:Transfer of property for step up in basis

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Tax Questions --> Transfer of property for step up in basis


Doc (talk|edits) said:

10 January 2007
Advising client whose father died and left 3 properties with substantial step-up in basis. Property to be divided equally between siblings. Siblings intend to sell all property. My advise is to have property transferred into sibling names by deed to obtain step-up in basis rather than leave it in the estate for sale. This is an onerous task but seems best way to keep everything clean. It seems that if it is not transferred out of the the estate, the step-up would be lost and gains would have to be recognized by the estate. Any comments?

Death&Taxes (talk|edits) said:

10 January 2007
If these properties were in Father's name at death, they take the stepped up basis in the estate.

WesR (talk|edits) said:

10 January 2007
Hi agree with D&T sell everything in the estate will be cleaner, easier, recognize the CG and then divy up the cash.bye

Dennis (talk|edits) said:

10 January 2007
Who sells the property has no bearing on basis, which will be stepped up unless under contract to sell on date of death. Three is the borderline and while virtually all of us report these sales at the estate level it should be noted that many states effect transfer of real property by operation of law rather than will and that the estate technically needs a reason to sell rather than merely distribute the property. If transfer by "heirs at law" is an option in your state and there is no reason to open a probate proceeding you might consider a direct sale by the three beneficiaries with each reporting his share on his own 1040.

Doc (talk|edits) said:

11 January 2007
Thank you all for your advice. I had not thought of the estate as an entity (which it is) but rather as an extension of the deceased. Seems that because the estate is an entity, it can receive the step up in basis and sell all properties, recognizing only the gain between decedent's death and time of sale. That is much cleaner, and easier to explain to the client. Thanks, again

To join in on this discussion, you must first log in.
Personal tools