An interesting question

[JG EA]

This is a basis question: If TP quit claims property to a relative and a couple of years later the relative quit claims it back - would the TP have the original basis?

[jainen]

adjustments over time

>>would the TP have the original basis?<<

Maybe, assuming the two transfers were gifts. But that's not exactly a reasonable assumption. It depends on what the "valuable consideration" mentioned in the deeds is. And that might depend on any improvements or other basis adjustments over time.

[JG EA]

Thank you Jainen

Yes, they were gifts. How does the basis follow? Is it carried with the gift and so becomes the basis of the relative and then carried back to the TP? I guess that makes sense now that you helped me out of the thinking rut I was in. There were no improvements - property values went up but that wouldn't make any difference. (No gift tax returns were done however.)

[S T]

Gifts

My thought, first quit claim gift to donor, 2nd quit claim, gift back.

So use basis rules for gifting. Gift back on 2nd quit claim could have some improvements, so basis could be different.

Sounds like maybe they were trying to hide some assets!

Jainen has a point on the "valuable consideration" on the property transfers, so you might have to look into that! Then depending couldn't that be a sale?

Sandy

[JG EA]

Good thoughts

But there were other reasons not connected to anything bad. TP just wanted to not worry about the property, the responsibility, etc. Later the relative restored the property to its rightful place.

[jainen]

I'm reading that book

>>Are the shades of Pemberly to be thus poluted?<<

You know, JG, I'm reading that book right now. I chose it for tax season because it's full of hilarious human folly, and also because I know the pages very well so it doesn't demand too much of me.

Concerning the bad sport who took back his gift, let us not forget that donee's basis is FMV when it creates a loss.

[OldJack]

And lets not forget the anti-churn rules if it is depreciable property.

[JG EA]

Several books on the night stand.

J: I selected the most boring I could think of so I'll go to sleep faster. (P&P is not one of them - it is one of my favorites for reading when I can pay attention.) Unfortunately one of group of books started to pick up after 185 pages and so I'll reading too many pages each night.

Thanks for the reminders. I printed out a bunch of basis info to keep it all in mind.

OJ: Thanks also, not depreciable, just land.