@taxseason1958 wrote:
My question is not as complex as those you stated in your reply. here is my particular circumstance:
Parents purchase home in 1963 parents divorce in 1970 Mother gets home in divorce and son moves in with her in 1984 to care for her and Mother adds son to deed in 1984. Deed is titled as Joint with Right of Survivorship, no "Life Estate" indicated on deed when the son is added. Mother passes in 2013 and home passes to the son and he subsequently sells home in 2020. Need to determine the adjusted basis for reporting gain on sale of residence in 2020 to determine if son has a gain in excess of $250,000 exclusion. thank you,
The general rule is that if the son did not contribute to the purchase price, the son received a stepped-up basis equal to the FMV on the date his mother died in 2013. The son's basis would be further increased by any improvements made to the home after 2013. This could be affected by any quirks in the laws of your state, and I am not an attorney, so if you want an definitive opinion, you should ask a professional in your state.
See page 10 here https://www.irs.gov/pub/irs-pdf/p551.pdf
