My mother passed away in 2018, and she was predeceased by my father 14 years earlier. After my father's death, for estate planning purposes, our attorney used a quit-claim deed to transfer their house to my name, but with my mother retaining life-use. They purchased the house back in the 1950s, and it was never used for any commercial purposes, rental, etc. I sold the house late last year after my mother's passing.
Researching how to correctly determine the house's cost basis has been rather frustrating as I have found a variety of answers ranging from the cost basis is the original 1950s purchase price + capital improvements up to complicated formulas proportioning the capital gains on a % basis split between the purchase date vs. the date of death of each parent, etc. However, the simplest answer I have found was that because my mother retained life-use, I did not have full ownership to be able to sell the property until after her death, so the date of her passing is the date for the cost basis ... this was an online attorney site, and seemed to make the most sense, but I don't want to assume that is 100% correct.
Can somebody please offer guidance on this question / direct me to resources or publications that can speak authoritatively on the subject? I live in NY State if that would have an impact on how this would apply to life-estate situations. Thanks!
