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Get your taxes done using TurboTax
Real Estate follows State rules, however USUALLY the rent is claimed on the final return of the Estate.
If the Executor gave you the remaining rent (after any money was used for repairs and/or mortgage) that would be considered as a gift.
Gifts are not claimed nor reported by the Taxpayer who receives the gift.
HOWEVER you say "it was gifted to me by the new official family owner"
If the property passed from the estate to a family member AND THEN WAS GIFTED TO YOU, your basis is the basis of the property is determined as follows:
"To figure out the basis of property received as a gift, you must know three amounts:
- The donor's adjusted basis just before the donor made the gift.
- The fair market value (FMV) of the property at the time the donor made the gift.
- The amount of any gift tax paid on the gift (Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return).
If the FMV of the property at the time the donor made the gift is less than the donor's adjusted basis, your adjusted basis depends on whether you have a gain or loss when you dispose of the property.
- Your adjusted basis for figuring a gain is the donor's adjusted basis just before the donor made the gift, increased or decreased by any required adjustments to basis while you held the property.
- Your adjusted basis for figuring a loss is the FMV of the property at the time the donor made the gift, increased or decreased by any required adjustments to basis while you held the property.
- Note: 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 get a gain, you have neither a gain nor loss on the sale or disposition of the property.
If the FMV of the property at the time the donor made the gift is equal to or greater than the donor's adjusted basis, your adjusted basis is the donor's adjusted basis just before the donor made the gift, increased or decreased by any required adjustments to basis while you held the property.
- If the donor paid a gift tax on the gift and made the gift after 1976, increase your basis by the gift tax paid on the net increase in value. "
"The donor's adjusted basis just before the donor made the gift." THE FAIR MARKET VALUE ON DATE OF DEATH
"The fair market value (FMV) of the property at the time the donor made the gift." THE FAIR MARKET VALUE WHEN YOU BECAME OWNER
"The amount of any gift tax paid on the gift" YOU WOULD GET THIS FROM THE EXECUTOR OF THE ESTATE
Use an honest effort to determine the value of the property on the date of death.
Use the tax roll as previously suggested, or speak with a local Real Estate Broker or Appraiser.
Chances are the inheritance and sale will be a wash since the value of the property would not have changed substantially during the several months you were the owner.
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