In pub 537 it says that if you inherit an installment obligation it is taxed the same as it was for the seller. However; when you inherit property, the basis of the inherited property is the FMV on the date you inherit the property. The FMV of an installment obligation will the sum of the principal plus the gross profit to the decedent. Thus it seems to me that the gross profit percent, to the beneficiary, should be zero because of the stepped up basis. What am I missing?
- posted
13 years ago