Legal Question in Tax Law in New York

Basis of Cost for Capital Gains Tax

I was gifted property back in 1990 valued at $10,000 an acre. The title was transfered into my name from my father's. We are about to sell this property and are trying to determine the basis of cost for the property. I have gotten two different answers. One is the basis of cost is $10,000 based on time of gift and title transfer. The other is the basis is the purchase price at the time my father purchased the land back in 1950's approximately $1,000/per acre (we are unsure of this amount - no records from this time). Which is correct?


Asked on 3/28/05, 11:24 am

1 Answer from Attorneys
Norman Nadel Norman Nadel, Esq.

Re: Basis of Cost for Capital Gains Tax

The rule is quite simple.

Your cost basis is the lower of (1) the fair market value at the time of the gift or (2) the cost basis in the hands of the donor (generally, the original cost).

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Answered on 3/28/05, 1:42 pm


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