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QUESTION DETAIL
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Can a property on a life estate be entitled to a step up in basis? I inherited 1/2 of a property 10 years ago, and the other 1/2 in 2011. The remaining 1/2 had rights to property until death. I realize the 1/2 I inherited in 2011 gets a step up in basis, but what about the 1/2 I inherited 10 years ago. I did not have possession of the property until now.
ANSWER
Expert Mark Anderson's Answer:
If you inherited the property 10 years ago, then the basis will be determined at that time. There is a difference between owning the life estate or receiving it in inheritance and possession of the property. The property's basis is determined when you inherited the property.
