Roadrunner
Junior Member
What is the name of your state? IN
I posted to this forum back in January about this situation. Much thanks to those who answered then and were of tremendous help (LdiJ & abezon). There are a few odd and end questions left, however, the answers to which should clear up everything completely for me; and I hope someone can answer them for me now. There is a very long and complex history, all of which I will not repeat in this post; but this is the bottom line.
In addition to my residence I own another house which I estimate on today’s market would be worth ~$150K. Built in 1967, my father transferred it to me in 1977. Since 1980 I have lived elsewhere while a succession of different relatives have lived there rent free. It is currently occupied by my stepsister and her aunt. From 1980 until now I have paid out slightly over $40K in principal, interest, taxes, insurance, and more on a house in which I did not live and for which I received no benefit. I would like to recover that amount. I have offered to sell it to my stepsister for an amount which after paying capital gains would net me the ~$40K. That would be about $40-50K depending on how much basis we can come up with.
I again thank those who answered in January. I hope someone can answer the following questions which I still have about this.
I have documentation for ~$33,000 of basis which includes improvements and ~$14.5K for materials and labor for construction. I do not have any documentation for the cost of the lot; but I think it was $5,000. During 1970-71 my father finished the basement, doing the work himself and creating a large family room, 2 BR’s & a bath. I have no documentation for this; but I think we spent $1,000-2,000 altogether on materials. Can either of these be estimated and claimed as part of the basis?
I have documentation for $700 in landscaping (new shrubs). Would this count as basis?
Abezon’s answer to my January post said the basis would include “Mortgage interest & property taxes IF you elected to capitalize them instead of deducting them each year on Schedule A.” I deducted property taxes on Schedule A for a number of years until my total possible deductions became less than the standard deduction. Thereafter I quit itemizing and started using the standard deduction. Does the fact that I did not list them on Schedule A mean that I “elected to capitalize them”? Can I include property taxes for the years I did not itemize as part of the basis?
If property taxes can be used as part of the basis, that could make the total basis more than the ~$40,000 I want to receive. I know that I could not claim a capital loss when selling the house at an absurdly lowball price. Might making the basis exactly the same as the selling price raise red flags at the IRS? Should I claim slightly less basis; or would just the lowball selling price itself raise red flags? Of course I know all this is absolutely proper; but a red flag could lead to hassle and inconvenience.
Thanks for your answers.What is the name of your state?
I posted to this forum back in January about this situation. Much thanks to those who answered then and were of tremendous help (LdiJ & abezon). There are a few odd and end questions left, however, the answers to which should clear up everything completely for me; and I hope someone can answer them for me now. There is a very long and complex history, all of which I will not repeat in this post; but this is the bottom line.
In addition to my residence I own another house which I estimate on today’s market would be worth ~$150K. Built in 1967, my father transferred it to me in 1977. Since 1980 I have lived elsewhere while a succession of different relatives have lived there rent free. It is currently occupied by my stepsister and her aunt. From 1980 until now I have paid out slightly over $40K in principal, interest, taxes, insurance, and more on a house in which I did not live and for which I received no benefit. I would like to recover that amount. I have offered to sell it to my stepsister for an amount which after paying capital gains would net me the ~$40K. That would be about $40-50K depending on how much basis we can come up with.
I again thank those who answered in January. I hope someone can answer the following questions which I still have about this.
I have documentation for ~$33,000 of basis which includes improvements and ~$14.5K for materials and labor for construction. I do not have any documentation for the cost of the lot; but I think it was $5,000. During 1970-71 my father finished the basement, doing the work himself and creating a large family room, 2 BR’s & a bath. I have no documentation for this; but I think we spent $1,000-2,000 altogether on materials. Can either of these be estimated and claimed as part of the basis?
I have documentation for $700 in landscaping (new shrubs). Would this count as basis?
Abezon’s answer to my January post said the basis would include “Mortgage interest & property taxes IF you elected to capitalize them instead of deducting them each year on Schedule A.” I deducted property taxes on Schedule A for a number of years until my total possible deductions became less than the standard deduction. Thereafter I quit itemizing and started using the standard deduction. Does the fact that I did not list them on Schedule A mean that I “elected to capitalize them”? Can I include property taxes for the years I did not itemize as part of the basis?
If property taxes can be used as part of the basis, that could make the total basis more than the ~$40,000 I want to receive. I know that I could not claim a capital loss when selling the house at an absurdly lowball price. Might making the basis exactly the same as the selling price raise red flags at the IRS? Should I claim slightly less basis; or would just the lowball selling price itself raise red flags? Of course I know all this is absolutely proper; but a red flag could lead to hassle and inconvenience.
Thanks for your answers.What is the name of your state?
