Question

Timber Sale from land gifted back in 2006

Forum|Forum|5 years ago
June 9, 2020
1 reply
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My husband was gifted land that was in a land management program. In 2019, he was required to have the land clear-cut and received $19,000 for the sale of the timber. We are trying to figure out how to answer the Gift Information section but unsure what to use in the FMV field and the donor's cost basis field. First, can we enter the FMV of the LAND listed on the 2006 property tax statement in the Turbo Tax FMV field at time of gifting? Second, how do we find out the donor's cost basis when we don't know when he purchased it or how much he paid for it?

Thanks in advance for your help!

RobertG

This is a difficult situation. You just have to use a reasonable method to come up with the FMV and basis, when records aren't readily available.

Using the property tax statement for FMV is a reasonable method.

Estimating the donors basis if you don't know when it was acquired is more difficult.

You still own the land, so it is only your basis in the timber that has been sold. Your basis in the timber would be the value of the timber at the time it was purchased by the donor. That may be very low.

The worst case scenario is that you would have to pay capital gains on $19,000.

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