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jakescia
Posted 9/15/2021 12:23 (#9221635 - in reply to #9221392)
Subject: Date of death of transferor........period.



Oskaloosa, Iowa 52577

Date of death of transferor........period.


The person who owns the land just before the transfer, and transfers the land to the estate, sets the basis for the entire parcel.

So....in case of husband/wife, husband dies, HIS HALF gets the stepped up basis as of the date of his death (or the alternate valuation date if chosen by the executor).

When the wife dies---- who now owns the entire parcel------- the entire parcel gets a step up to the market value as of her date of death.

If the husband's share went into a trust, so the wife only continued to own half...........the basis remains what it was established to be as of husband's death, and the other half gets a step up to market as of wife's death.

Also..........do not rely on this until you check out whether or not the gift has to pass thru probate.........I do not recall the details, but I THINK that the parcel needs to be reported on an estate tax form------706 as I recall.

Note that the preparer of that estate tax form is held liable for the accuracy of the reported fair market value...............so, one cannot just recreate the situation at will.  There needs to be contemporaneous documentation.

Summary--- the question as to who owns the property at time of transfer needs to be answered first.    If jointly held,  say, a trust and a person, then the trust has to terminate in some manner as to ownership, and then the person to whom the assets are transferred becomes the person to be watched for as to market value.  

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