Property acquired from a decedent: establishing basis

Article Abstract:

The acquisition of property from a decedent can be very beneficial if the property has accrued value since it was purchased because the gain is not subject to federal income tax. IRC section 1014 makes the estate tax value basis equal to the fair market value at the decedent's death, the value at an alternative date under section 2032 or the special-use valuation under section 2032A. Therefore, the increase in basis is transferred to the beneficiary without income tax liability, making section 1014 a useful estate planning tool.

Planning, Transfer taxes, Valuation, Real property, Real estate appraisal, Transfer (Law)

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Liquidation distributions: the decision to utilize Section 453(h)

Article Abstract:

Shareholders of C and S corporations are allowed to receive installment obligations free of current taxation in a corporate liquidation under sections 452(h) and 453B(h). Taxpayers should compare the benefits of these sections with the tax liability incurred if the corporation collects the installment note and distributes already taxed proceeds to the shareholders. Examples of installment distribution strategies are discussed.

Taxation, Laws, regulations and rules, Recognition of gain or loss (Taxation), Recognized gain or loss (Taxation), Corporate distributions, Installment contracts, Liquidation

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