Legal Question in Real Estate Law in Virginia
gift of home
My mother died in 2006, In 1997 she did a deed of gift on her home to me. She bought the home in 1974 for $18,500. We sold the home in 2008 for $75,000. Do I pay capital gains tax on the amount the home was valued at in 1997 or back to when she purchased the home. I have been told all improvements come off the difference, I paid for her funeral, because she did not have insurance. Can I take this off also. Any information would be appreciated.
1 Answer from Attorneys
Re: gift of home
No, a deed of gift would not entitle you to take the stepped up basis in 1997 to which you would've been entitled to if you had in fact taken title to the property at that time through inheritance rather than deed of gift.
Consequently, you received your mother's basis in 1974 for purposes of figuring your capital gains tax liability.
And, no, I don't see how you could lump your mother's funeral expenses in with the house improvement expenses and discount them, accordingly.
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