What if your parents gave you the property for $1, they weren't deceased when they deeded it to you. How does this work? Is the basis based on the date of the deed?
Good question, and thank you for watching Donna! I have always understood that as gifted property, and that it has less tax advantages because the capital gains would be calculated based on what the parents purchased the property for. Your basis goes back to the parents' purchase price, whereas in this case above ^ there is a stepped up basis. That said, this is a case-sensitive thing and I would always want you to hear it from a CPA as well. If you have any more questions don't hesitate to contact me at Craig@PowerRealtyBoston.com.
What if your parents gave you the property for $1, they weren't deceased when they deeded it to you. How does this work? Is the basis based on the date of the deed?
Good question, and thank you for watching Donna! I have always understood that as gifted property, and that it has less tax advantages because the capital gains would be calculated based on what the parents purchased the property for. Your basis goes back to the parents' purchase price, whereas in this case above ^ there is a stepped up basis. That said, this is a case-sensitive thing and I would always want you to hear it from a CPA as well. If you have any more questions don't hesitate to contact me at Craig@PowerRealtyBoston.com.