Another Tax Question

[Mjcpr]

Boy this is fun. :rolleyes:

When you sell an investment property (rental house) you are required to report the sale amount (less a few fees), the sale date, the purchase date and the purchase amount. I assume this is to determine Capital Gains/Losses. Well, this is grandma's return and I sold her 4 rent houses in 2005. Unfortunately, I have no idea what she paid for them because they've been around for as long as I can remember and I can find no documents that would give me this info.

I do know that 2 of them were willed to her so I'm guessing the purchase amount on those will be $0.00, right? The other two were purchased but I don't know when or for how much? Am I going to have to go through some BS at the County to find out this information or can I just make **** up?

TIA

[Hamhock]

I'm gonna go with the former. Besides, you don't want to pay more tax than you have to. Generally, making **** up is frowned upon as far as tax returns go.

[Mjcpr]

So what would I be looking for at the County to obtain this information?

Also, how long until you start charging me for free SO advice?

[Hamhock]

Not real sure. I just know that the purchase price of real property is recorded. Call the county tax assessor. If you can catch them in the 17 minutes between smoke breaks, potty breaks, lunch and afternoon nap, they should be able to help you.

Who said any of this advice was free?

[Mjcpr]

Who said any of this advice was free?

Gotta run! ;)

On the willed properties, I'm going to have to go with $0 aren't I?

I added this information on TurboTax and woooooo what a difference it made. Despite $23k in nursing home/medical expenses, she appears to be on the hook for a little over $1k in taxes to the Feds.

I guess it's off to the Muskogee Co Tax Assessor next week.

[Hamhock]

Property that passes at death receives a "step-up" basis. That means her basis is the FMV of the property when she inherited.

You really oughta get a professional involved.

Pick me up some Chet's when you're down there.

[JohnnyMack]

Can any of this end up with you in the clink?

[Cam]

Suck it up and hire an accountant.

[76sooner]

do it in ine now for 9 smackys....yeah

[Mjcpr]

You really oughta get a professional involved.

I am...becuase of the sale of the houses. I don't know enough about it. I wanted to see what kind of tax bill I was looking at by trying TurboTax then it became a mission to figure it out. :)

She has a lady in Muskogee that does her taxes...I'll take them to her. But I'm still going to have to find out this info before I dump everything on her.

[Hamhock]

Just don't forget me some Chet's.

[Mjcpr]

do it in ine now for 9 smackys....yeah

Are you willing to help me with my tax questions?

[Mjcpr]

Can any of this end up with you in the clink?
Me, no. Granny........maybe.


;)

[JohnnyMack]

Me, no. Granny........maybe.


;)

That'd get you a permanent seat at the kids table for Thanksgiving.

[BeetDigger]

Don't screw up or Granny might just redo the will.

[Vaevictis]

You can always make **** up. The problem is that if you get audited, and you underestimated your tax liability, you're going to be on the hook for penalties at the very least.

Generally, the difference between jail and just penalties is good faith (or at least, the IRS perceiving good faith). If you must guess, it must be a good faith guess. If you need to, you can contact the IRS what to do in situations where you can't find the real purchase price; they can probably guide you, and if you follow their instructions, they can hardly get you, right?

What I would suggest is do your best to find out the correct price; failing that, contact the IRS and ask what an appropriate estimation method is. They almost certainly have one, as you can't possibly be the only person to encounter the problem.

If you have to, I think you can always set the initial value to zero, pay the tax on the total value, and amend the taxes at a later date to get the difference back; bad part is you're out the cash until you amend and the IRS processes it. Good part is that there is no chance for penalties or jail.

[Taxman71]

Hamhock is right. Inherited property receives a stepped-up basis equal to the FMV on the date of death. Locate the estate tax return or Final Decree for the deceased (assuming the property was probated) to get this information.

Search the property records (hire a title company or the like) to get a copy of the deed where grandma purchased the property. Determine the purchase price by looking at the documentary stamps tax.

FYI - unless you can prove your adjusted basis, the basis is assumed to be zero by the IRS.

If you want to amend later to get a refund, remember you have to do so within 3 years of 4/15/06 or your refund is lost.

[Widescreen]

Are you willing to help me with my tax questions?
No, tampons are not tax deductible.

Although you can potentially deduct the sales tax.

[76sooner]

Are you willing to help me with my tax questions?
uh no..sorry...probably too much to do it on line sorry....wasnt all there...:)

[Mjcpr]

uh no..sorry...probably too much to do it on line sorry....wasnt all there...:)

If nothing else, I appreciate your prompt response.

:D

[Widescreen]

You didn't thank me for my response. :mad:

[critical_phil]

http://img65.imageshack.us/img65/8520/10403lr.jpg

[jkm, the stolen pifwafwi]

you also need to make sure she hasn't amortized any of that property from her previous returns.

[Mjcpr]

You didn't thank me for my response. :mad:

Gimme a few days.


:D

[Mjcpr]

you also need to make sure she hasn't amortized any of that property from her previous returns.

She hasn't. There hasn't been the best of accounting practices over the years for her and her property.

[Stoop Dawg]

So what would I be looking for at the County to obtain this information?

http://www.oklahomacounty.org/assessor/Searches/DefaultSearch.asp

Once you find the property look under "Sales Documents/Deed History". You can also get information on property taxes paid there.