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See what's trending for the November 15th deadline (Form 990) and resources for the upcoming tax season. View ProSeries Hot Topics.
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Adjusted Basis
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sharpcougar
Level 3
01-13-2023
04:42 PM
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Follow up on earlier Question
Mom gifts daughter a house on 9/13/2021. House was purchased in 2017 for $157K encumbered by mortgage.
Daughter was living in the house since 2017. Daughter sells the house 1 month after it was gifted for $225K. At closing mortgage of $41K was paid off and daughter received the rest of money.
How does the $41 affect the basis?
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Terry53029
Level 14
01-14-2023
12:17 PM
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Mortgage has no effect on basis. If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property.
see pub 551.
