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I have taken the giant leap of contacting my father's attorney to see if he knows my father's intentions as to what he's going to report this property as - I doubt that will be fruitful, but it can't hurt to ask.

I will try to get figures from my mother as to the actual value of the assets and the amount of the inequity in the settlement she gave up in lieu of his leaving the land to the children, although if the value of the property he was *supposed* to leave us far exceeds any amount she may have gotten if they sold it, would that be a valid figure?

Also a question, is there any way that this question can be asked of the IRS now, to see if they can give a definitive answer?

Thanks again....

One possibility -- if the property restriction was the only concession Zoe2k's mother received in exchange for what she gave up, then the value of what she gave up may be the basis for the remainder interest that she (mother) gifted to Zoe2k and her sister. If so, then Zoe2k's basis for all the property at issue is half the value of what her mother should have, but didn't, receive in the divorce.

It gets worse, as intimated by my last paragraph. The divorce transaction originally covered substantially more land, so some of Zoe2k's original basis (whatever it may have been) should be allocated to that land. The land was sold some time ago without Zoe2k's consent, and with her realizing none of the proceeds at all. Query: Is she entitled to a capital loss?

Finally, her holding period was probably more than five years. Thus, if Zoe2k can keep herself in the 15% bracket, then she may be eligible for the 8% extra-long-term capital gains rate. --Bob
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