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Basis of Inherited Property – Paul Gaulkin CPA

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Basis of an inherited capital asset is generally going to be the fair market value of the property on the date of death or alternative valuation date, if elected by the personal representative. With the exception of 2010 transfers electing modified carryover basis, a gain on inherited property is always long term. Step Up Basis A step up in basis occurs when the fair market value is greater than the decedent’s basis. It is important however to understand that the … Read more

Adjusted Basis Calculation for Gain or loss on Property – Paul Gaulkin CPA

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Before a taxpayer can figure out the gain or loss on the sale, exchange, or other disposition of property or figuring allowance depreciation, depletion, or amortization, a taxpayer must usually make certain adjustments to the cost of the property. Once these adjustments are made, the amount remaining is the adjusted basis. Below is a list of the specific items that can increase or decrease the basis of property for gain or loss calculations. Items that Increase Basis You can increase … Read more