@VTCATS wrote:
So from that I read, it's not 1986 I should be looking at, but 2008 when it was gifted. Can anyone confirm?
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.
Yes, I can confirm; you read the passage you cited wrong.
Since the FMV is greater than the donor's basis, your basis is the donor's adjusted basis just before the donor made the gift.
The forgoing means you take the donor's adjusted basis and not the FMV in 2008.
Note, however, that if you happened to sell the home at a loss (which is highly unlikely), only then would you use the FMV on the date of the gift to calculate the extent of your loss.
