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Fri 30 Jan, 2004 03:33 pm
I have a question regarding capital gains. Forty years ago I inherited a small parcel of undeveloped property. I kept it and paid tax with the hope that I would someday build upon it. That never did nor is it likely to happen. Therefore when I got an offer for the property I was glad to sell. Therein lies the problem. I am in a quandary regarding how to declare capital gains since I have no idea regarding the properties value at the time of inheritance. Any suggestions?
Yuck. The County Clerk should have a listing of all transfers of property. You might be able to contact them and see if any other property in the same area of about the same size was sold around that time-frame and use that as an estimate of "Fair Market Value" for your adjusted basis.
The only other thing I can think of would be to check the probate records and see if the value of the property was listed when the estate was probated.
The parcel was part of some other real estate holdings and not listed separately.
I contacted the county clerk but all I was able to get was the assessed value of the property at that time.
What I have in mind to do is to subtract that assessed value from the assessed value at the time of sale and use that figure as capital gains. I probably will be cheating myself but better safe than sorry when it comes to the IRS.
Ooh, roger or cicerone imposter might know - you might want to PM either of them with the url of this topic and ask one or the other to drop by.
My response is not about legal aspect, but purely theoretical. A capital gain (a "flow" concept) must be calculated on the annual basis. It means that the capital gain through a year is the difference of the value at the end of the year and the (estimated) value at the beginning of the year.
Thanks for the thought, jespah, but I know when I'm out of my depth. Maybe Mac11 or Peace and Love.
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