If I inherit fully depreciated property, what is the fair market value on the date of death?

August 12, 2011

From:  Jin
Date:  1 Jul 2009

Dear Sir!

I have a question for you. If I inherit property that was fully depreciated by the decedent, is the tax basis of the property the fair market value on the date of death and do I get to start depreciating the property over again?

Thanks and I am waiting your response...

Answer

Date:  10 Jul 2009

Hello Jin,

Generally the answer is yes to both questions. You will need to establish the portion of the "fresh start" basis attributable to depreciable improvements. (Property inside an entity, such as an S corporation or corporation, won’t qualify for this treatment.)

Good luck!
Mike Gray

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