Value of Property

[Stan Thigpen]

Several years ago my Dad gave me several parcels of rural farm land which he had inherited from his Mother in 1960. Last year I sold one of the parcels and now as tax time rolls around, I need to determine what my basis is in this land. As I understand it, my basis will be the same as my father's when he inherited it. However, I have no idea how to find out what that amount would be. I can't ask my Dad for assistance, as he died last year. Have any of you had such a situation and do you have any suggestions as to how I might be able to determine the value of a plot of land in 1960?

[Rick Gifford]

The county courthouse should have tax records on file. See if you can find the assessed value in 1960 for tax purposes of that land. Probably has the whole parcel listed, but you can do some math and get a best guess for your lot. With a copy of the records on hand you can back up your claim of value if questioned.

Best I can think of unless there was land sold on file for 1960 that is comparable to what you have. I doubt that though.

[Rob Russell]

As I understand it, my basis will be the same as my father's when he inherited it.

Hmmm - I would have thought that your basis would be the value of the property at the time ownership transferred from your Dad to you. Perhaps this is a good question for a tax attorney - it might be worth the small consult fee.

[Cliff Rohrabacher]

Your base is what you paid. If it was a gift your base is a "carryover" from the donor's basis.
If it depreciates you use the Fair market Value at time of transfer.

Inheritences are different.

Your basis on inherited property is "stepped" (up or down) from the decedent's basis to Fair market Value at the time of the death of the person who devised it to you.

[Randy Cohen]

I am a CPA with much experience in this area. I'm not sure what this property is worth but at the time your Dad gave it to you he might have been subject to gift tax. Since there was no gift tax return filed the best you can do for basis is to use its FMV at the time it passed to your Dad. Had he filed a gift tax return the basis would have been stepped up to the FMV at the time of the gift.
A gift tax return is usually filed whether there is tax or not in order to establish the FMV.
You might be able to go to the local courthouse and look at land sale records from the time when your Dad inherited the land and find similar parcels that were sold at that time. If you do this keep copies of your research.