@VolvoGirl wrote:
I've been following this thread. I have a question. Are we sure all 3 siblings inherited it? Sounded to me like the poster only inherited it. Just a thought and wrinkle.
There was a will, unsigned. All three sibs inherited, taxpayer bought out his sibs with small payments (the house seems to have been in poor condition and needed a lot of work). Taxpayer was unsure how to calculate their basis to report the sale.
My question was, how is basis affected when the buyout was not at FMV, and was that affected by the fact that the buyer and sellers were related. @M-MTax helpfully found the correct regulation. In the end, the taxpayer is entitled to a full stepped up basis, but by an indirect route.
