That depends. If he truly gifted you both the house and retained no rights, then your basis is the basis your father had [purchase price plus capital improvements]. But most likely, and you will need an attorney to get more information, your father either retained an interest in the house legally, or he ratined it in actuality, in which case it would still be included in his estate and you would get a step up in basis equal to the FMV of the home the day he died. This is a question you truly need to see an attorney well versed in probate and estates. It's worth the time and money to get a good reliable answer.
Eric P. Rothenberg, P.C.
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Mr. Rothenberg is on target, as usual. The answer to your question depends on the facts of the situation. Given the potential for significant capital gains, you really owe it to yourselves to meet with an experienced probate attorney.
E. Alexandra "Sasha" Golden is a Massachusetts lawyer. All answers are based on Massachusetts law. All answers are for educational purposes and no attorney-client relationship is formed by providing an answer to a question.
Have the numbers crunched by an accountant
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As others have noted, it may depend upon other facts. I.e., if he retained a life estate, then you would get a "step up" in basis. Likewise, if the house received a step up in basis at your mother's death, and the value subsequently went down, you may have a lower gain or no gain. It can get a little complicated. You should either speak with a probate attorney or CPA. Note that there may be title issues as well, depending upon the date of death and the value of the house. Good luck!
Me condolences to you and your family on the passing of your father. It is never easy to lose a parent.
I concur with other counsel and their answers. It does really depend on the circumstances and whether this was in fact a "true gift" before your father passed.
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