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Transferred Basis

[trans-FURD BAY-sis]

What is the definition of Transferred Basis?
Transferred basis is the carryover of the basis of property from one entity to another, such as from a donor to a recipient, or from one business structure to another. This occurs in various transactions including gifts, transfers in trusts, transfers to controlled corporations, contributions to partnerships, and liquidating distributions from a corporation.
Using Transferred Basis in an Example

If a parent gifts their child a property that was originally purchased for $100,000, and at the time of the gift, the property's market value is $150,000, the child's basis in the property would be the same as the parent's original purchase price, which is $100,000. This is an example of a transferred basis.

Using Transferred Basis in a sentence

During the estate planning meeting, the attorney explained how the transferred basis of the inherited stocks would affect the beneficiaries' tax obligations upon selling them.

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Tax Court

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Tenancy-in-Common

A form of co-ownership where each owner holds an undivided interest in property, and upon death, their share passes to their heirs or beneficiaries rather than to the other co-owners.
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The act of conducting a business agreement or exchange that is recorded as an entry in accounting books.
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Transfer Tax

A tax imposed by the government on the transfer of ownership of property, including gifts and estates, as transactions occur.
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A place or department where the funds and revenues of a government, corporation, or institution are managed and safeguarded.
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