cost basis

[lily2]

What is the name of your state (only U.S. law)? maine

what is the cost basis of a home that was given to me for $1 and other valuable considerations? Is it $1 or the v alue of the property when received?

[anteater]

Neither.

Your cost basis is the giftor's adjusted cost basis.

[JETX]

Originally Posted by lily2

what is the cost basis of a home that was given to me for $1 and other valuable considerations? Is it $1 or the v alue of the property when received?

From IRS publication 551:
"To figure the basis of property you receive as a gift, you must know its adjusted basis (defined earlier) to the donor just before it was given to you, its FMV at the time it was given to you, and any gift tax paid on it.

FMV Less Than Donor's Adjusted Basis
If the FMV of the property at the time of the gift is less than the donor's adjusted basis, your basis depends on whether you have a gain or a loss when you dispose of the property. Your basis for figuring gain is the same as the donor's adjusted basis plus or minus any required adjustment to basis while you held the property. Your basis for figuring loss is its FMV when you received the gift plus or minus any required adjustment to basis while you held the property.

If you use the donor's adjusted basis for figuring a gain and get a loss, and then use the FMV for figuring a loss and have a gain, you have neither gain nor loss on the sale or disposition of the property.

FMV Equal to or More Than Donor's Adjusted Basis
If the FMV of the property is equal to or greater than the donor's adjusted basis, your basis is the donor's adjusted basis at the time you received the gift. Increase your basis by all or part of any gift tax paid, depending on the date of the gift."
[url=http://www.irs.gov/publications/p551/ar02.html#d0e1873]Publication 551 (5/2002), Basis of Assets[/url]