[bob51]

My father purchased land in 1950, built on the property where he and his wife (my mother) lived until his death in 1979 at which time my mother assumed the full deed. Over several years during the late 1980's, my mother gifted undivided parcels of all the land to her 5 children. We five now are in the process of dividing the property into smaller parcels to be owned by individual children. At the time that I begin to sell my portion, from what point do I extract a basis on which to compute capital gains ?

[ebaines]

Since this property is a gift to you from your mother, your cost basis is set equal to her original cost basis for the parcel she gave you. If you received 1/5 of the land, your basis is 1/5 of her basis. Her basis depends on the particular circumstance of how she came to own the property:

1. If your mother was not on the original property deed at the time of your father's death, so she inherited the property from him, then her cost basis is the fair market value at the time of your father's death in 1979.

2. If she was on the original deed with your father, as joint tenant with right of survivorship, then her cost basis is the original purchase price from 1950.

In either case the cost of any capital improvements that have been made gets added to the cost basis.

As you go forward to divide the property through gifts to your children be sure to let them know what their cost basis is.

[bob51]

Thank you!