I have questions about the tax basis on two separate property sales in 2022.
The first property is a farm. The farm was owned by my grandfather who died in 1976. His estate was probated in 1977. The will states: “To (my father), I give the farm for his lifetime and at his death to his children, Brother 1, Me and Brother 2, or the survivors of them living at his death.” Brother 1 died in 2019 and is survived by three children. My Father died in Jan 2022. The farm was sold in March 2022.
What is the tax basis? Is it a) date of my father’s death for all of us? Or b) date of my grandfather’s death for me and Brother 2 and date of Brother 1’s death for his three children? Or c) something else?
If we use date of my grandfather’s death for me and Brother 2, do we use the value or remainder value listed in the probate documents:
value $27,500
Life estate value $16,527.50
Remainder value $10,972.50
We each received a 1099-S for the sale of this property with the value distributed among me, brother 2, and brother 1’s children.
The second property is my father’s house which was placed in a beneficiary deed in 2002, prior to my stepmother’s death in 2002. There are nine named beneficiaries including my two brothers and me and six stepbrothers/stepsisters. The beneficiary deed contains the language “This deed is subject to revocation and change in the manner provided by law.”
What is the tax basis? Is it a) date of my father’s death for all of us? Or b) date the Beneficiary Deed was recorded for me and Brother 2 and date of Brother 1’s death for his three children? Or c) something else?
