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Author: TMFExRO Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121451  
Subject: Re: Capital gains on real estate Date: 7/8/2000 9:40 AM
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<< Is there any way for my mother to avoid paying capital gains on some property she inherited from my father? It sounds like if she transferred it to me I would still be responsible for the capital gains no step up, correct? She received a step up from my father correct? >>

The facts are a little scant here, but I'll make some assumptions: your father owned the property as his separate property, it passed to your mother as an inheritance from him, and she's never lived in it. Her basis is the fair market value of the property at the time of your father's death.

If she sells the property for more than her basis, she owes tax on the gain. If she gives you the property, you get it at her basis, i.e. the value at the time of your father's death.

If the owner of the property is interested in a "like kind exchange," it's possible to trade this property for other property without immediate tax consequence. If the owner of the property is interested in living in it for 2 years before selling, then the principal residence exclusion would apply. (If the property has been rented, there would be some depreciation recapture.)

Without more information, that's about all I can come up with.

TMF ExRO
Phil Marti
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