In 2012, my mother transferred her home to me via Quitclaim Deed while retaining a life tenancy. At the date of this transfer, my mother's basis in the house was $289,000 and the house was appraised at $280,000. All the literature says you can use the step-upped basis going forward, but in this case the appraisal at time at the transfer was LOWER than Mom's basis. Mom no longer lives in the house and I sold it in 2021 for 272,000, so I need to report this sale in 2021. Can I bring forward her basis of $294,000 and report a loss of $17,000 or am I required to use the $280,000 appraised value and report a loss of $8,000?
