i also guess you also may read this; When a TP dies, no gain is reported on depreciable real property transferred to his heir. However, if the decedent disposed of the property while alive and, because of his method of accounting or for any other reason, the gain from the disposition is reportable by the beneficiary, it must be reported in the same way the decedent would have had to report it if he were still alive.Ordinary income due to depreciation must be reported on a transfer from an executor to an heir, beneficiary, or other individual if the transfer is a sale or exchange on which gain is realized. Say your GF owned depreciable rental property that, upon his death, was inherited by you. No ordinary income from depreciation is reportable on the transfer, even though the value used for estate tax purposes is more than the adjusted basis of the property to you when your GF died. However, if he sold the property before his death and realized a gain and if, because of his method of accounting, the proceeds from the sale are income in respect of a decedent reportable by you, you must report ordinary income from depreciation. |