Investors & landlords

You have to calculate your basis in this scenario since the life tenants essentially gave you a gift of their interest.

 

In that event, you have a carryover basis for the value of the life tenancy relinquished (plus your basis as remainderman). You need to use the IRS actuarial tables to determine the value of the life estate.

 

See https://www.irs.gov/retirement-plans/actuarial-tables

View solution in original post