by Angela on June 11th, 2009

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Son inherited house from dad. House has a promissory to pay dad's ex-spouse. Son took mortgage to pay off promissory note. What is the cost basis of the house?

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by Possum on May 26th, 2010
in general market value less debt

was note to ex actually on house?
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by mobilityadvoc8 on October 18th, 2009
Typically, property inherited gets a "step up" in basis - that is to say, the basis is the fair market value of the property at the time of death.

Your son would have a cost basis of his father's share of the house at fair market value at the time of his death. Under 26 USC 1016(b), where there is a substituted basis (as in this case), the adjustment is made on the property before it is transferred to your son.

It's difficult to be specific where the facts are not clear. I suggest your son consult a tax professional to get specific answers.
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Son inherited house from dad. House has a promissory to pay dad's ex-spouse. Son took mortgage to pay off promissory note. What is the cost basis of the house?

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Son inherited house from dad. House has a promissory to pay dad's ex-spouse. Son took mortgage to pay off promissory note. What is the cost basis of the house?

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