Question

How do I update FMV when sold? Deceased Spouse owned 50% of rental property.

Forum|Forum|4 years ago
March 19, 2022
2 replies
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My husband owned 50% of a rental property and passed away in 2020. The property has remained rented the entire time. Last year I continued filing on the property as we have always done. I have now sold my half of the inherited property to the co-owner. I am using Turbo Tax Premier. How do I correct the FMV to the stepped up value at date of death.

M

MAK70

If you used TurboTax it will have the historical information, so you should be able to enter an adjusted basis in the Sale of Business property section.

M

Mike9241

sorry for your loss

was a partnership return filed in 2020 (and all prior years) because it seems 60% was owned by your spouse and the other 50% was owned by an outsider.

for your spouse's 1/2 depreciation should have been computed using original cost for the portion of the year he was alive. for the rest of the year the FMV (less the FMV of the land) should have been used to compute depreciation

the FMV would carry over to 2021 for purposes of computing depreciation.

if this wasn't done you should consult a pro because this needs correction.

the tax laws would require depreciation recapture for the larger of the amount you took or the amount allowable after he died. there would be no recapture for all the depreciation taken before he died.