Full question:
What form do we need to report inheritance of property on our income tax return?
- Category: Taxes
- Date:
- State: Illinois
Answer:
The requirements for reporting inherited property on your income tax return depend on your specific situation, such as whether you are the personal representative of the estate. Generally, the basis of property inherited from a decedent is its fair market value (FMV) on the date of the decedent's death. If the property is jointly held, the surviving spouse typically receives a stepped-up basis for half of that property.
If a federal tax return is required and the property must be included in the decedent's gross estate, the basis is again the FMV at the date of death. Alternatively, you may elect to use an alternate valuation date, which values the property six months after the decedent's death, provided the property has not been sold or otherwise disposed of (see IRC § 2032 for more details on alternate valuation).
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.