Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next
Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121179  
Subject: Co-op share valuation for estate tax Date: 7/9/2013 9:39 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I'm working on an Estate and ran across a situation that I'd love an opinion on.

Decedent is second to die and owns shares in a co-op (prumary residence). I know that the best method for valuation is either a certified appraisal as of the date of death or an actual sale of the shares shortly after the date of death. Here are the facts that I have.

Co-op shares were appraised at $X in 2005 when first spouse died. The co-op shares were sold approximately 8 months after death for ~1/2 $X. Even sithout a DoD appraisal, I know that the value of the co=op unit didn't change much since DoD.

But I had this offbeat idea today. Although the co-op is treated like real estate in many ways, it is actually shares in a corporation. I could determine a valuation by looking at the sales just before and after the Dod and interpolating a price/share on the DoD. The issue is one of fungibility. Technically, the shares you own in a co-op give you the right to occupy a specific unit, but otherwise are indistinguishable from any other shares.

This might work to the Estate's advantage because the unit in question hadn't been renovated and needed some work. We're only looking at NJ Estate Tax (Estate value is below the federal threshold) and I expect the interpolated valuation will be higher than either a DoD appraisal or the actual sales price. The capital loss on the sale using the higher valuation may be worth more to the beneficiary than the additional NJ Estate Tax.

Any thoughts from those with more experience?

Ira
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (6) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement