I sold land my mother & I owned (jointly) in 2016. Do I get a stepped up basis on all or stepped up only on half since I owned it jointly since it was purchased?

[Texas Roger]

How did you acquire your mother's half?

[user1115551]

I inherited it in 2007 (her half) when she passed. My name was put on the deed as joint owner when she bought it in 1976. I didn't know about the purchase until she had me start paying taxes in about 2003. The land was an investment lot in the Bahamas. She paid about 3600.00 in 1976 and I sold for about 20,xxx.xx xxxx.

[TaxGuyBill · Accepted solution]

Only her half gets the stepped up basis.  Your half remains the same.

[TaxGuyBill]

If you are saying you sold it for $20 million dollars, you should go to a tax professional.  Actually, you really should have gone to a tax professional BEFORE you sold it.

[user1115551]

Sorry, it was sold for 20 thousand

[user1115551]

I read somewhere if I contributed none of the purchase cost, it could all be stepped up???

[TaxGuyBill]

Interesting, I think you are right.  However, you should consult an Estate Attorney to confirm.  You should specifically mention "Section 2040(a)" of the tax code, and ask about 'tracing' who paid for it.
<a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/uscode/text/26/2040">https://www.law.cornell.edu/uscode/text/26/2040</a>

[bobweissman]

The other question is, stepped up to what? You need to know the date of death value from 2007.

[user1115551]

The land was purchased in 1976 for approx $3,650. Sold in 2016 for approx $20.000. The value in 2007 was approx $30,000 to 35,000  according to realtor's appraisal in 2007. As with a lot of investment land values dropped in the late 2000s. I decided to just get rid of it and be done with it to avoid further HOA and tax payments.