Thanks Marilyn,
To be clear...
1) So then, something I'd heard prior, that I needed an FMV from the date made JT to set my wife's basis (and spent $1200 to obtain), is indeed irrelevant and not even considered? It seems logical to me that some entity would reset the basis due to the 'change in ownership' just like they reevaluate taxes on a home with change of ownership. Although, in this case, I suppose it's not really a complete change in ownership. (just musing)
2) Pls confirm that the 'stepped up cost basis' in your second point is the same as 1/2 the FMV at DOD.
3) We are talking the FULL Net Proceeds, those after sales expenses and I assume state taxes, being deducted as they were at closing, right? not 1/2 of the Net proceeds? 🙂
4 Does this Example look correct? Original cost to aunt - $50,000. When made JT, each holds $25,000. FMV @ DOD (and sale price) - $300,000. Taxable amount is calculated as... $300,000 - $25,00 - $150,000 = $125,000. (just to compare if cost basis adjusted at time made JT... and starting there... Cost basis at time made JT - $200,000; $100,000 assigned to each. FMV @ DOD - $300,000. Taxable amount is calculated as... $300,000-100,000=
5) Oh! And after further reading some articles, it seems that the IRS(?) allows the sales price to be the FMV, if sold within 6 months of the inheritance... do you concur?
Thanks again!
Yea, so I ran our numbers the new way and unfortunately, it sends the Fed taxes due through the roof because of using the original cost basis from 1967! Ugh... I guess that's why the government does it that way... they can't stand for the servants to get something for nothing. LOL I'm going to talk to the CPA that told me about the cost basis needing be be adjusted at time made JT.
