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lb1942
Returning Member

Tax on sale of vacant property

My mom added me as joint owner with rights of survivorship on 3 vacant lot properties she owned in LA County CA in April 1996. She died in Oct 2000 and I am selling the lots in 2020. How do I figure out my cost basis on the properties when I sell. Do I need an assessed value for both 1996 and 2000? Looking at the tax record is useless as value is listed as less than $200 when similar properties are selling for much more.

4 Replies
Bees
Level 7

Tax on sale of vacant property

Look at the county records for when your mother bought the property . That is the cost basis you need.

Maybe, maybe she gifted you half so you could get a step up basis on her half but with joint ownership that is likely to be disputed by IRS. 

Disclaimer: Not a tax professional. Information gathered from internet links. Anything dated in June 2019 was posted in prior years and is before the 2019 limits and changes.
lb1942
Returning Member

Tax on sale of vacant property

Thanks. My mom inherited the property from my dad who died in 1970 but didn't have the title changed to her name until 1994 and didn't put me on as joint owner until 1996. So do you think my cost basis would be an assessment from 1970?? As I mentioned before the land value listed on the tax records is not close to being correct - ie way, way too low. 

Anonymous
Not applicable

Tax on sale of vacant property

in many cases tax records are useless because they don't reflect cost. 

A joint tenancy is a concurrent estate in which two or more persons have an undivided interest in the same property. In California, joint tenancies must be created via the same instrument, usually by deed or by will; each owner must also receive the same or equal interest in the entire property. Joint tenants receive all the same rights. Joint tenancies often include a right of survivorship, meaning when one tenant dies the others receive the deceased owner's share.

 

i would take the position that since your mother made you a joint tenant you inherited her 1/2 when she died. that means you have two values you need.  her cost basis for the 1/2 gifted and FMV of the other 1/2 when she died.  you probably will need to contact a realtor in the area who would be best at providing estimates of the values you need.   the IRS could challenge the values. they have their own experts.   

lb1942
Returning Member

Tax on sale of vacant property

Thank you. The information you provided sounds very reasonable. So I need to get an appraisal for the properties for both 1970 when my father died and my mother inherited them, and for 2000 when my mother died and I inherited them, and take half of each added together to get my basis for tax purposes. Getting the appraisals that far back will be challenging! But it looks like that's what I need.  Thanks again. 

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