Lifetime Right Of Occupancy: What is the step up in basis date ?

[Inherited_Property]

Hello,

In a lifetime right of occupancy does the step up in basis start at the date of death or when the lifetime occupant moves out ?

Ex: Grandfather passes away 2 years ago. He lets his wife(not grandmother) live in the house with a lifetime right of occupancy. She moves out 9 months ago and the house is sold after she moves out.

When does the basis start, at date of death for grandfather or when wife moves out ?

Thanks!

 

[army judge]

lifetime right of occupancy does the step up in basis start at the date of death or when the lifetime occupant moves out

I suspect you are the remainderman, or one of the remaindermen.

If that is the case, this is probably what you're asking, so read on.

The Remainderman(men) automatically become owner(s) of the real estate immediately upon the death of the last to die of the Life Tenant Estate Owner(s).

The Remainderman(men) has/have no right to use of the property or income from the property during the Life Tenant's term, unless the conveying document says otherwise.

The Remainderman(men) is not responsible for payment of taxes, insurance, or maintenance of the property during the Life Tenant's term, unless the conveying document says otherwise.

Upon the death of the last Life Tenant(s) the property automatically belongs to the Remainderman(men), without any requirement of Probate for the real estate.

Costs and delays of probate are avoided when the property is owned in the Life Estate ownership conveyance document.

 

[zddoodah]

Grandfather passes away 2 years ago. He lets his wife(not grandmother) live in the house with a lifetime right of occupancy.

What does this mean? If he's dead, he obviously did "let" her do anything, so there are a couple of possibilities here: (1) while he was alive, he conveyed a life estate to his wife; (2) his will provided for this "lifetime right of occupancy;" or (3) she received a "lifetime right of occupancy" pursuant to the intestate laws of the unidentified state where the property is located. Which is it (or is it something else)?

She moves out 9 months ago and the house is sold after she moves out.

Sold by whom?

Please also clarify what your question -- "when does the basis start" -- means. Are you asking when the basis is determined? Whose basis? Also, please identify the relevant state.

 

[Inherited_Property]

What does this mean? If he's dead, he obviously did "let" her do anything, so there are a couple of possibilities here:

It was written in the revocable living trust there was a Lifetime right of occupancy for her.

Sold by whom?

The 3 beneficiaries of the revocable living trust. 2 children and 1 grandchild.

Please also clarify what your question -- "when does the basis start" -- means. Are you asking when the basis is determined? Whose basis? Also, please identify the relevant state.

State: CA

The date for when the basis starts for determining the stepped up basis. Its either the date of grandfathers death (2 years ago) or the date the lifetime right of occupancy ended ( 9 months ago) as grandfathers wife moved out of the house.

The trust instructed that title be placed into the 3 beneficiaries names when the wife moved out and ended the lifetime right of occupancy. (If this matters)

Sorry if I am not clear.

 

[zddoodah]

Ok...more questions...

It was written in the revocable living trust there was a Lifetime right of occupancy for her.

I interpret this to mean that, while your grandfather was alive, he created a trust and transferred title to the property in question to the trust. In that trust, it states that, after he dies, his wife gets to live in the property for life. Most importantly, this makes it sound like his wife had no interest of record in the property. Rather, she had only the right of occupancy as conferred by the trust. All correct?

Sold by whom?

The 3 beneficiaries of the revocable living trust. 2 children and 1 grandchild.

I assume this was done after title was transferred as you mentioned at the end of the most recent post. Correct?

The date for when the basis starts for determining the stepped up basis. Its either the date of grandfathers death (2 years ago) or the date the lifetime right of occupancy ended ( 9 months ago) as grandfathers wife moved out of the house.

I assume you're talking about the three beneficiaries' bases. If so, they obviously should confer with a tax attorney or CPA about that -- particularly if there's a significant difference in the property's value as of date of death versus the date when your grandfather's wife moved out.

 

[Inherited_Property]

Ok...more questions...



I interpret this to mean that, while your grandfather was alive, he created a trust and transferred title to the property in question to the trust. In that trust, it states that, after he dies, his wife gets to live in the property for life. Most importantly, this makes it sound like his wife had no interest of record in the property. Rather, she had only the right of occupancy as conferred by the trust. All correct?

That sounds correct.

I assume this was done after title was transferred as you mentioned at the end of the most recent post. Correct?

Yes, house sold after title put in the beneficiaries names. About 9 months ago title was put in beneficiaries names.

I assume you're talking about the three beneficiaries' bases. If so, they obviously should confer with a tax attorney or CPA about that -- particularly if there's a significant difference in the property's value as of date of death versus the date when your grandfather's wife moved out.

I have talked to some and had conflicting views that why I am asking here.

 

[army judge]

I have talked to some and had conflicting views that why I am asking here.

The questions you ask on the internet will receive ONLY general answers.

You could search the 'net yourself and gather the same or similar information.

I suggest you HIRE yourself a CPA or a tax attorney, as they are the professionals who KNOW tax laws and financial ramifications related to your actions.

To provide the answers you desire one would need to personally review your finances, assets, liabilities, and income.

Again, only a CPA or tax attorney can provide you specific, precise tax related information.

A CPA or tax attorney will only do so after you've hired one and received a written retainer spelling out what you're paying for and what you'll receive.

Good luck.

 

[zddoodah]

I have talked to some and had conflicting views that why I am asking here.

To the best of my knowledge, no one here (myself included) has any particular expertise in tax law. There is another, similar forum on which I post where a very knowledgeable tax attorney posts. However, at the end of the day, the way to deal with this situation is to hire a tax attorney or CPA to prepare your taxes. Simply asking informally isn't the right way to handle this.

 

[Inherited_Property]

To the best of my knowledge, no one here (myself included) has any particular expertise in tax law. There is another, similar forum on which I post where a very knowledgeable tax attorney posts. However, at the end of the day, the way to deal with this situation is to hire a tax attorney or CPA to prepare your taxes. Simply asking informally isn't the right way to handle this.

You are right. I hired 3 different ones, cost was only several thousands of dollars. The prices really varied too from each professional. One guy was funny at the end he said he wanted to do more research. I was pretty happy he was helping me out so much. They all 3 had different opinions which I found really neat.

So I guess now I know there are different opinions. The only issue is each one correct.

I am not hear to "deal with this situation". I am here because this forum represents itself as a discussion forum for legal help and information on an informal basis.