Deeded Home

[bardon]

I know that when an individual dies his home is valued at the date of death, and the heir's inherit it at that amount.

What value do you use, if the home was deeded to the heir prior to death???

Your help is appreciated.

Bardon

[mcb39]

If it is an outright deeded gift and not a Life Estate, the basis is the whatever the basis was for the person who deeded it away before he died. Depending on how long he had it and what improvements and/or expenses you can prove to add to the basis; it could be quite a Capital Gain....

[mgmea]

If it is an outright deeded gift and not a Life Estate, the basis is the whatever the basis was for the person who deeded it away before he died. Depending on how long he had it and what improvements and/or expenses you can prove to add to the basis; it could be quite a Capital Gain....

Did the decedent gift the house to the heir before death? Did the decedent continue to live in the house until death? If so, under IRC Sec 2036, this is a transfer with a retained interest and gets a stepped up basis to FMV at date of death. A formal life estate is NOT required. See the Form 706 instructions page 15 for an example of this situation.