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1099S

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Level 2

TP inherited a mobile home when parent died

Corporation owning the property sold the home 

The basis is the amount the home was sold for, I think, and if so, there is no tax liability

Am I correct

The transactions occurred within 4 months of parent's death

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Level 11

What I love about tax work

You learn something new every day!

Sounds like this is a mobile home in a co-op.  I always think of co-ops as something found mostly in New York City and other foreign countries. 

But apparently there is a movement to convert trailer -- excuse me, mobile home -- parks into co-ops.

And that's what it sounds like you have here.  

So I think the stepped-up basis rules apply, but I really don't have any experience with co-op ownership.  There are a few old ones in my area, and I do know that one of the major drawbacks is that they are bought and sold for cash only -- no financing.

For more information see  https://rocusa.org/   -- they might even have some tax information.  

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Level 15

Are you saying "the corporation" owned the land that the mobile home was on, but that the corporation did NOT own the mobile home?

If the corp didn't own the mobile home, there's no reason to present that irrelevant info.  If the corp DID own the mobile home, your client didn't inherit it.

I'm a bit confused on the fact pattern.

***********

And, off topic, WHY is the real estate in a corp?  BAD, BAD idea.

 

Former Chump... umm.... AllStar.
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Level 11

Estate planning is not a one-size-fits-all game.  Mobile homes are not real estate, but putting real estate in a corporation sometimes is a good idea.  

Here's a corollary to my axioms "90% of the people who have a living trust don't need one, but 90% of the people who need a living trust don't have one" and "90% of the people who buy annuities shouldn't, but 90% of the people who should buy annuities, don't" --

"90% of the people who put real estate into a corporation or LLC, shouldn't; but 90% of the people who should do it, don't."

But your answer does point out the confusion in the question.  Did the clients inherit a mobile home, or did they inherit shares in a company?

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Level 2

Thank you so much for your informative reply

I will find out the answer

I understood that the co-op wanted the land and sold the mobil home to make room and then gave the TP the proceeds

My thought was that the basis-or price they sold at should be  the TP basis and thus, no tax liability 

Highlighted
Level 11

What I love about tax work

You learn something new every day!

Sounds like this is a mobile home in a co-op.  I always think of co-ops as something found mostly in New York City and other foreign countries. 

But apparently there is a movement to convert trailer -- excuse me, mobile home -- parks into co-ops.

And that's what it sounds like you have here.  

So I think the stepped-up basis rules apply, but I really don't have any experience with co-op ownership.  There are a few old ones in my area, and I do know that one of the major drawbacks is that they are bought and sold for cash only -- no financing.

For more information see  https://rocusa.org/   -- they might even have some tax information.  

View solution in original post

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Level 2

abctax55

Thank you for your insight

I think this is above my knowledge and certainly the client has NO IDEA

I'll keep checking for facts.