Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

March 19, 2013
How do I determine value of interest in land as of 2002?

Q. 170 vacant, unimproved acres (3/4 mile on beach), with ownership split 40 ways within extended family, sold to Land Conservancy in 2012. Our portion is about 1.2% and was given to us in 2002 by father. How do we determine value of property in 2002 for income tax purposes? No realtor in area (Santa Barbara Co.) can help us.

Meadow Vista, CA

A. First, you need to determine what the proper measure of "tax basis" is for the fractional interest that you sold in 2012. That depends on whether you received the interest by gift or by inheritance. Your question says it was given to you, so we will start with the gift scenario.

If you received the interest from your father by gift, then his tax basis becomes your tax basis. So the first course of action would be to ask him, if he is available, what his tax basis was in the property. The value of the property interest in 2002 would be irrelevant other than for gift tax purposes for your father. If the gift was valued in excess of $10,000, a gift tax return, IRS Form 709, should have been filed. His tax basis should be disclosed in the gift tax return. So if you can't ask your father, look for a gift tax return. If you can locate a copy of the gift tax return, contact your father's accountant or estate planning attorney as they may have a copy.

If you had received the interest by inheritance, then your basis becomes the "fair market value" as of the date of your father's death (or the value 6 months later if his estate gave rise to an estate tax liability and the alternate valuation date was elected). The fair market value of the property would be dislcosed in the estate tax return, IRS Form 706. So the 2002 value may not be relevant unless your father died near the time of the gift.

If you find that you do need the fair market value as of 2002, contact a real estate appraiser. For a referral, contact an estate planning attorney or accountant in the Santa Barbara area. There are a number of appraisal designations. I suggest using someone who meets the IRS's requirements to be a "qualified appraiser" as set forth in the instructions to IRS Form 8283, Noncash Charitable Contributions.

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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