sale of life estate property

[BOB W]

If property was put in sons name, why would that not be a gift and basis not be same as mothers? gift?

thanks

It was an incomplete gift when it was put in son's name, ( Mom retained all rights of ownership) so Mom's basis does not apply. Upon Mom's death (the gift, which is no longer a gift) is completed and treated as an inheritence for tax purposes. Thus FMV applies on the date of death.

If Mom decided to sell the property during her life time, the property would be first transferred back to her and then sold in her name with all rights of residency.

[newbie]

When the house passed thru life estate at Mom's death it is inheritance with the basis being FMV at DOD.

[gman]

basis

If property was put in sons name, why would that not be a gift and basis not be same as mothers? gift?

thanks

[BOB W]

Mother has 5 kids. Puts her home in life estate and names one of them as the owner.(remainderan?). Mother passes and 3 years later they sell the house. Mother instructed owner/son to divide sale income among all 5 kids.
1. Can the sale/1099 list all 5 kids or only the one owner.
2. What would cost basis be-mothers cost?

Son/owner never lived in house.

thanks

Cost basis is FMV on date of death of mother. Only the child on the deed reports the income or loss. Since it is investment property, losses are allowed. More than likely there is a loss since FMV was 3 years ago.

Gift tax returns will be needed when the proceeds are divided.

[gman]

Mother has 5 kids. Puts her home in life estate and names one of them as the owner.(remainderan?). Mother passes and 3 years later they sell the house. Mother instructed owner/son to divide sale income among all 5 kids.
1. Can the sale/1099 list all 5 kids or only the one owner.
2. What would cost basis be-mothers cost?

Son/owner never lived in house.

thanks