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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Life Estate House Sale
Expert: John Kirk, CPA
Date: 9/9/2008
Subject: Life Estate House Sale
Question
My grandfather passed away in April 2008. His house was put into his children's names but he lived there under a life long lease. Now the house is for sale, we have received conflicting opinions from different tax professionals as to whether the capital gain from the sale of the house is taxable. First, what is the cost basis of the house? Is it the fair market value at the time of death? Is the capital gain taxable? Thank you.
Answer
Assuming that your grandfather put the house into a life estate, the house is transferred at fair value at the time of transfer to the trust. Any gain on sale of the house is reported by the beneficiaries of the life estate trust.
John Kirk, CPA
www.johnkirkcpa.com
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