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akatschi1: "In 1983, my father gifted my brother and myself a property that my brother lived on from before then to when he and I sold it in 2000. My father officially lived there from 1986, but I could probably prove he was there from 1983. My father died in 1998. My brother and his wife will take $500,000 in capital gains exclusions. I am wondering if my tax basis can be stepped up to 1998 when my father died; none of them paid rent to me and the intent at the time the property was gifted was to avoid inheritance taxes. I paid the taxes in 1998. Otherwise my basis will be my father's basis when he inherited it in 1953."

Unfortunately, you cannot have your cake and it eat, too.

Either it was a gift in 1983, and thus avoided estate taxes upon your father's passing in 1998, or it was not a gift and your father owned it at his death and it was includible in the valueof your father's estate.

There is no gift that avoids estate tax and also benefits from the step-up in value for assets passing through an estate.

If it is any consolation, it should be LTCG taxed at a maximum of 20%.

Regards, JAFO

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