Capitalize Legal Expenses Added to Basis for Fighting Contested Estate

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  • HCM
    Junior Member
    • Jun 2015
    • 4

    #1

    Capitalize Legal Expenses Added to Basis for Fighting Contested Estate

    Unrelated taxpayer was willed land, house, personal property, and mineral rights. A relative contested will. It took 10 years and $60,000 legal expenses before Court granted possession of all property to taxpayer. Can DOD 10 years ago basis be adjusted with prorated legal expenses for investment property portion (land, house, and mineral rights?
  • Burke
    Senior Member
    • Jan 2008
    • 7068

    #2
    Is he intending to sell these items now?

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    • HCM
      Junior Member
      • Jun 2015
      • 4

      #3
      Yes, planning to sell the following separately: plot of land (treated as investment), home that has been vacant for entire period (treated as investment), and personal property.

      Comment

      • New York Enrolled Agent
        Senior Member
        • Nov 2006
        • 1530

        #4
        Take a look at Reg. 1.212-1(k) and see if your situation is in line with the capitalization of costs to perfect title.

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