What is basis of home sold for $ 1 to child. Home sold for $ 220,000, can annual gift amount and expense of sale be written off proceeds? Thank you.

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itonewbieAnswer

Level 15

Whether the son had lived in the house is irrelevant. Agree it was a gift and your client along with the father's estate should check if a gift tax return was filed back then for the transfer.

It may well be that the father had erroneously recognized a loss or treated that as §267 disallowed loss but none of the should matter.

---------------------------------------------------------------------------------Still an AllStar

itonewbieAnswer

Level 15

Whether the son had lived in the house is irrelevant. Agree it was a gift and your client along with the father's estate should check if a gift tax return was filed back then for the transfer.

It may well be that the father had erroneously recognized a loss or treated that as §267 disallowed loss but none of the should matter.

---------------------------------------------------------------------------------Still an AllStar

G

grossieAuthor

Level 5

itonewbie, I never encountered a transaction like this. I had a fear that my client would have a basis of $ 1.
Many thanks.

T

TaxGuyBill

It was a gift to the child, so the Basis is the Basis of the giver (plus any adjustments after that). Maybe plus $1 too.

G

grossieAuthor

Level 5

TaxGuyBill, My information was incomplete. Sorry. Father made transfer to son in 2001. Father died in 2018. Son sold house in late 2018. Son has not lived in house for 20 years. Thank you.

sjrcpa

Level 15

Expenses of sale are deductible to reduce gain.

The more I know the more I don’t know.

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