I hope I have this right but it involves quite a sum of money so I just want to make sure.
I have a client who owned a home along with his mother.They origionally purchased it for $160,000. back a few years ago.
The taxpayers mother lived in the house but taxpayer did not. The mother died in march of 2005 and taxpayer sold the house in may. The house sold for $511,000. I figured it must have been worth that same amount when the mother died so I figured his basis like this:
$80,000 from the origional purchase plus $255,500 that he inherited from his mother for a total of $335,500.
Is this correct?
By the way, he, along with two other men built a house in 2005 and sold that also. I did'nt put that on a schedule C because he said he was not really in that business or anything, It was just a one time thing. Is this also correct?
I just treated that as a home sold also on schedule D with no exclusions.
Thanks for any input
Ken
I have a client who owned a home along with his mother.They origionally purchased it for $160,000. back a few years ago.
The taxpayers mother lived in the house but taxpayer did not. The mother died in march of 2005 and taxpayer sold the house in may. The house sold for $511,000. I figured it must have been worth that same amount when the mother died so I figured his basis like this:
$80,000 from the origional purchase plus $255,500 that he inherited from his mother for a total of $335,500.
Is this correct?
By the way, he, along with two other men built a house in 2005 and sold that also. I did'nt put that on a schedule C because he said he was not really in that business or anything, It was just a one time thing. Is this also correct?
I just treated that as a home sold also on schedule D with no exclusions.
Thanks for any input
Ken
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