Posted by Natalie-VA on March 23, 2006 at 16:14:09:
Jeff,
What happens when you get audited and you can’t show the IRS a settlment statement showing the higher purchase price?
I think a better solution would be to sell it within the next 3 years and avoid the tax. This assumes that at the time of sale you lived in the property the last 2 out of 5 years. I am not a CPA or attorney…just bouncing around ideas.
–Natalie
Increasing my tax basis - Posted by Jeff
Posted by Jeff on March 22, 2006 at 20:38:14:
I’m moving to a nearby city and am going to keep my current residence as an investment property. I’m looking at the LLC route, which looks good as long as I can “sell” the property to my LLC. My local circuit court says all I need to do is have a lawyer draw up a deed transfer document.
Here’s my issue and question. Can I have this deed transfer reflect the current market value of the home so my basis is increased in the LLC? My current appraisal is $60k more than I paid for the house, and I want to take that gain off the table now, rather than get taxed on it in 3 or 5 years or whenever I end up selling it.
Re: Increasing my tax basis - Posted by John K Haslach, CPA, MST
Posted by John K Haslach, CPA, MST on March 25, 2006 at 16:07:44:
Your basis is what your basis is. You cannot avoid the gain simply by recording a deed a higher number.