1031 exchange inherited property

Comments: I received a quit claim deed to my parents home in 1998.  They  continued to live in the house until they both passed away (father 2001 and  mother 2005.  I sold the house in 2005 for 88000.  The value of the  house  in 1998 was 68000. can I use that figure to capital gains?

Dear D:  Unfortunately your assumption is probably incorrect.  When a property is gifted the person receiving the gift receives the  tax basis of the person making the gift.  It appears to me that your parents gifted you the property thereby transferring their basis in the property to you to.  Your basis would not be the FMV on the date of the gift.  Instead it would be whatever their basis was.  Sorry.  S.

Steve Hickox
Attorney / President