Originally posted by New York Enrolled Agent
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Forgive me for intruding, but I've never had to deal with this, and have always been curious about it (but too lazy to look it up).
So let's put it into an example. Let's say original purchase price was $100,000 and sales price was $200,000 (and assume no improvements or other adjustments to Basis). So is the following how it would work?
Life Tenant Basis = $100,000 x 0.64337 (factor at time Life Estate was created)
Life Tenant Selling Price = $200,000 x 0.19523 (factor at end)
Remainderman Basis = $100,000 x 0.35663 (factor at time Life Estate was created)
Remainderman Selling Price = $200,000 x 0.80477 (factor at end)
Is that how the calculation works? Or I am I totally off? Thanks for indulging my curiosity, especially during a business time of year.
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