Tax Consequences of Property Transactions

Free CFP Exam lesson in Tax Planning. 21 min read, ~3,146 words.

Basis determines gain: cost, adjusted, carryover (gift), stepped-up (inheritance), or substituted (1031 exchange). Depreciation reduces basis even if the taxpayer never claimed it ("allowed or allowable"). Gifted property takes carryover basis, with a double-basis rule when FMV is below the donor's basis at the gift date. Inherited property receives a...