I inherited a rental property of which I have put into an LLC and now rent it out. However when I did my income taxes with Turbo Tax it ran a depreciation on the property. But I thought depreciation was on the cost of the property, does this apply to property I inherited ? In other words the only costs I had was paying the probate fees and also paying corporate distribution taxes since my mother had the property in a Corporation. There was costs so to speak but I did not buy the property for it's appraised value ? Appreciate any input
This question is an excellent example of what happens when Congress does not keep to a legislative agenda to fix estate and inheritance taxes.
When did you inherit the property? If your relative passed in 2009 your basis for depreciation was stepped up to the fair market value on the day of death or the FMV on the alternate valuation date. You should have an appraisal done as of one of those two dates to determine the new depreciable basis.
If it was 2010 you have to wait and see if Congress puts a patch in place or you will get no step up in basis and will pay full capital gains on the property at the time of sale.
Not to worry healthcare has been solved!
I would consult a tax attorney, when it comes to deductions related to property inheritance always changes the rules. I believe I replied in one of your other threads and this question can also be brought up to that same tax attorney. Best of luck!
jbeidle | Contributor | 4/14/2010 - 8:26 am
NRiddle | Contributor | 4/7/2010 - 8:06 pm
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