A Story That Says It All
David Moore recalled a call he once received from a woman with a complicated situation. “She had gotten the property from her incarcerated husband, who had gotten it from his incarcerated friend,” he said. The chain of ownership was unusual, but what stood out most was that she had no idea what her basis was.
David explained that when a property is gifted, the basis transfers along with it. The person receiving the property takes on the giver’s basis, not a new one. It was a perfect example of how confusing things can get when multiple transfers happen over time and no one keeps track of that original number.
Why People Often Don’t Know Their Basis
Tom Moore laughed and admitted that this kind of confusion is not rare. “People don’t know what their basis is,” he said. When he first started in the business, he noticed that many property owners couldn’t tell where their basis came from or what it meant. As he explained, this lack of understanding is common, especially when properties are transferred through gifts or unusual situations.
The Takeaway
Not knowing your basis is more common than you might think. But it is also one of the most important details you need to know in order to complete a successful 1031 Exchange. Your basis is the basis of your entire exchange and helps you make informed decisions when the time comes to sell or reinvest your property.
Be Ready Before You Sell
Don’t let uncertainty about your property’s basis slow you down. Get answers now with help from Equity Advantage and make sure your next 1031 Exchange goes smoothly.
The Guys With All The Answers…
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site, we are here to help Investors get where they want to be. Call them today! 503-635-1031.
