Posted by JHyre in Ohio on February 12, 2002 at 06:17:00:
Sales price less great grandma’s basis at the time he received it (probably her purchase price + improvements she made less any depreciation she took) less improvements he made plus depreciation that he’s taken = gain.
John Hyre
Tax Liability question. - Posted by Ronn (CA)
Posted by Ronn (CA) on February 11, 2002 at 17:13:08:
Here’s the scenario. My grandfather was given the deed to my great-grandmother’s house 20 years ago. She has passed on recently and now my grandfather is selling the house.
When he sells, what will he be taxed on? The sale price when he sells minus the value when he recieved the deed? Or, the sale price minus the price my great-grandmother paid. Or…?
Thnx
Ronn (CA)
Re: Tax Liability question. - Posted by Jeff M
Posted by Jeff M on February 12, 2002 at 11:40:03:
John is the tax expert, and I would listen to all he has to say. In my experience, we did the following. When my Mom died, we had an appraisal of the property done. That became our “cost basis”, and then, 5 years later, we sold it, and paid tax on the difference between selling price and cost basis. Lacking an appraisal, or some reasonable means of valuing the property from when your grand-dad took posession, I think John’s answer is the only answer.
However, I am left with one question. If that house could be considered your grand-dad’s primary residence, he gets an exclusion. I am not sure of the current amount of that exclusion, but it may be worth looking into. Good luck.