Calculating Basis for property inherited from joint tenant

[9523814128]

In 2009, I co-signed on a mortgage with my son to help him buy his home and wound up on the title as a joint tenant. I never made payments on the mortgage or lived in the home. He passed away in 2022 and his Joint Tenant "share" of the house came to me. My wife and I sold the house in 2023.

The original purchase price was about $70,000. At the time of his death, the county established the value of the property at $190,000. It sold for $208,000. (There were associated costs and fees with each of these sales -- I'm just trying to use round numbers.)

I've been told that half of my basis for the home would be the difference between our sale price and the original purchase price. ($208,000-$70,000=$138,000/2.)  The other half would be based upon the difference of the value at his date of death. ($208,000-$190,000=$18,000/2.)  Is this approach accurate?

I am also at a loss to find an IRS form that handles two basis calculations -- one for each of the different dates I established ownership. Any directions would be appreciated.

Thanks,

Ken

[MarilynG1]

Your original basis in the home would be 35K (half the original 70K cost).  When your son passed in 2022, you still have your original 35K basis, plus half of the 190K stepped-up basis as of date of death, so now your basis is 35K + 85K, or 120K.

Use that amount as your Cost Basis when reporting the sale, plus the Sales Expenses that were incurred, to subtract from the sale price of 208K, in determining any Taxable Capital Gain.  No need to report the different basis amounts separately. 

Here's details on how to enter the Sale of an Inherited Home in TurboTax.

Sorry for your loss.