Riddle Me This

[WhiteOleander]

Ok, I'm preparing a 2005 return.

T/P sold a parcel of land for $6000.

What is his basis?

Here's the story.

T/P was purchasing a piece of property and making payments to the owner. He fell behind on some of the payments. Owner sued my T/P. My T/P counter sued. My T/P won. (I don't know the details of the suit.) He won several hundred thousand dollars. Owner can't pay and files bankruptcy. My T/P is listed as one of the creditors. Bankruptcy court gives T/P a piece of property in settlement of the debt. (not the same property the lawsuit was over.)

So, the property is in a really depressed area. All he can get when he sells it is $6000.00.

Where do I begin for a basis?

Thanks

[ChEAr$]

Basis

Ok, I'm preparing a 2005 return.

T/P sold a parcel of land for $6000.

What is his basis?

Here's the story.

T/P was purchasing a piece of property and making payments to the owner. He fell behind on some of the payments. Owner sued my T/P. My T/P counter sued. My T/P won. (I don't know the details of the suit.) He won several hundred thousand dollars. Owner can't pay and files bankruptcy. My T/P is listed as one of the creditors. Bankruptcy court gives T/P a piece of property in settlement of the debt. (not the same property the lawsuit was over.)

So, the property is in a really depressed area. All he can get when he sells it is $6000.00.

Where do I begin for a basis?

Thanks

is in the eye of the beholder?
Well certainly the payments he made on the property count as basis. But I don't see
the other piece of property in partial settlement of a suit having anything to do with
the property sold for 6000. If anything, he might have taxable income for FMV of
that property, you reckon?

[oceanlovin'ea]

Which piece is he selling?

Is he selling the piece of property that was given to him in the settlement? Is the piece of property that he was paying on out of the picture now?

If the original piece is out of the picture, then I would think that what he had paid up till this point would be his basis.

Linda F

[WhiteOleander]

Is he selling the piece of property that was given to him in the settlement? Is the piece of property that he was paying on out of the picture now?

If the original piece is out of the picture, then I would think that what he had paid up till this point would be his basis.

Linda F

Yes, the original piece of property that they fought about is out of the picture.

The piece of property he sold was given to him by the bankruptcy court to satisfy his award from the lawsuit. He was listed as a creditor by the other person when that person filed bankruptcy.