Trust’s Deduction for Real Estate Gift Limited to Adjusted Basis in Property
10th Circuit agrees with IRS that section 642(c)(1) of Tax Code prevents deduction based on fair market value
Is a personal trust entitled to a full fair market value deduction for a gift of real estate just like an individual or corporate taxpayer? No, says the Tenth Circuit Court of Appeals in what appears to be a case of first impression in the courts. It has reversed a District Court opinion and held that the deduction is limited to the adjusted tax basis of the property under the special provisions of section 642(a)(1) of the Tax Code.
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