@aem1337 wrote:
I was going through the formula and realized FMV at time of death was not (obviously) included. Would I add the cost basis as of 2019 to step up basis to get the DOD value?
For example:
price of home 30k
+ cost to buy - 2k (etimating real estate fees at time)
+ improvements thru 2019 - 100k (estimate)
= cost basis as of 2019- $132k
Would i then add FMV at time of death (~450k from zillow/redfin) to the cost basis (132k) to get DOD value (582k)?
Think of it as 2 half-houses.
As of 2019, father's basis was $61K $66K and mother's basis was $61K $66K. When your father died, your mother inherited your father's half of the house at then-FMV (half of $450K = $225K) but her half basis is the same at $61K $66K, so her new basis is $286K $291K.
Also remember that although you can make reasonable estimates of the cost of improvements when you file, if you are audited, the IRS does not have to award any basis adjustments that can't be proven with reliable records.
