Quote:
Originally Posted by berettafan
Greg how does this part make sense?
If the child immediately turned around and sold the property for its gross estate value, they would only have to pay tax on the appreciation in value of their 50% ownership (including recaptured depreciation on their 50%).
'immediately turned around and sold' implies no gain as it is sold at death. Only recapture would be picked up. So where is the tax on 'appreciation in value'? Or is this just poorly written?
Also, if the parent includes the half previously gifted in their gross estate how is that not double counting it as presumably a gift tax return would have been filed already reducing the estate? ie single parent, 300k home, adds child so 150k gift. parent dies, estate should be 150k however link says 300k is gross estate; YET exemption is already reduced by 150k. I realize these figures don't touch the estate exemption but the theory should apply.
PS- this is why I don't do estate work! And probably why I have a terrible time finding quality cpa's to refer it to!
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As to the first, its somewhat poorly written. There would be gain to the extent of recaptured depreciation, depending on how the numbers crunched.
As to the double dipping, yeah. Its not a problem for the vast majority of us, but assuming you played by the rules and filed the gift tax return, the joint interest conveyed gets counted twice against the exclusion according to that brief blurb. It may be that there's a ruling or reg that offsets this, I'm not that deep into the weeds to know at this point.