Can I get a stepped up basis if my mother gifted her house to me and remained in her house by agreement until she died?

Forum|Forum|7 years ago
June 5, 2019
16 replies
58 views

She put my name on the deed 15 years ago and did not set up a life estate even though the agreement was that she remain in the house until her death.

Best answer by rjs

A life estate does not have to be explicitly established in the deed. Your mother probably had an "implied life estate." If so, that would give you the stepped up basis. There is case law on this. Check with a good lawyer.

rjs

Answer

Level 15

TaxGuyBill

Level 13

I agree. If the OP did not actually 'use' the home or benefit from it, it is an Implied Life Estate, with a Step-Up in Basis.

KrisD15

Level 15

Life Estates protect beneficiaries or a remainderman from inheriting large tax liabilities with a home. You state that you and your mother did not use one.

Real estate is handled differently from one state to another. In your case, I wish I could give you a definitive answer, but the best answer I can give you is to seek the advice of an attorney with background in real estate in the state where the property is located.

My original answer was based on too many assumptions.

[edited 01-17-19I3:30]

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Opus 17

Level 15

There's no half-step up if he was gifted the entire house in fee simple. There might be a half step-up if she made him a co-owner, which is not indicated here.

Opus 17

Level 15

[removed]

Opus 17

Level 15

So "implied life estate" is a thing. You still should see an attorney; for one thing, to get as much proof as you can of the "implied life estate" to satisfy the IRS if audited.