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    jim4eq's Avatar
    jim4eq Posts: 1, Reputation: 1
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    #1

    Sep 25, 2007, 11:26 AM
    Inherited private mortgage
    My dad sold some property and took back a mortgage. Dad is using the installment method.
    Dad is 99, so I'll end up inheriting the mortgage. When I do, what will be the basis?
    He sold the property for $350,000, and the profit percentage is 98%. So he has capital gains on the profits.
    Will I inherit at $350,000 basis or his basis of $7000? :confused:
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Sep 26, 2007, 12:31 PM
    The basis of property STEPS UP to the Fair Market Value of the property at the date of the decendent's death.

    I see no reason why the same principal would not apply to the installment note.
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