My mother's condo, which she sold in 2016, was purchased jointly in 1975 for 94000. When her husband died in 1989, the FMV of the condo was 275000. What is her basis?

[DanielV01 · Accepted solution]

It's somewhere in between the two.  Please see this IRS website:  https://www.irs.gov/publications/p551/ar02.html#en_US_201612_publink1000257012, and scroll down to the subheading "Qualified Joint Interest".  This describes your Mother's situation.  She is considered a co-owner with her husband when the property was purchased in 1975, so she shares half of that original basis, which would be 47,000.  When her husband died, in 1989, she inherited the other half of the property at the Fair Market Value of 137,500 (half of the FMV of the entire condo in 1989).  When you put the two together, her adjusted basis in the condo is 182,500.  This is the correct figure to use as the basis unless other facts and circumstances dictate otherwise.