I'm donation a piece of family heirloom furniture to a non profit. TT is asking me for the purchase price and I have no records. The item is valued between 2500 and 4500 (I'm getting an appraisal). What do I put down for cost? If I put zero it doesn't allow me to deduct anything. The piece clearly has value so can I not simply deduct the appraised value? If so then how do I fill out the part where it's asking for cost?
When you receive something by bequest (i.e. it's given to you because someone passed away and wanted you to have it upon their death) you receive what is called a "step up in basis". Generally, when someone gifts you an item (i.e. gives you something when they are still alive) you receive a "carry over basis".
Carry over basis = basis equal to that of the donor's when they held it.
Step in in basis = an adjustment from the basis when held by the donor to the fair market value at date of death.
Therefore, if you have received an item by bequest, your basis in that property will be equal to the fair market value of such property at the decedent's date of death.
It is generally advised that any large item/property inherited through bequest be appraised at the decedent's date of death.
When you receive something by bequest (i.e. it's given to you because someone passed away and wanted you to have it upon their death) you receive what is called a "step up in basis". Generally, when someone gifts you an item (i.e. gives you something when they are still alive) you receive a "carry over basis".
Carry over basis = basis equal to that of the donor's when they held it.
Step in in basis = an adjustment from the basis when held by the donor to the fair market value at date of death.
Therefore, if you have received an item by bequest, your basis in that property will be equal to the fair market value of such property at the decedent's date of death.
It is generally advised that any large item/property inherited through bequest be appraised at the decedent's date of death.
And if they aren't dead yet does it matter? In the TT box where it says cost basis and asks for a number what do you write there?