Step 1. Uniform basis (adjusted) immediately prior to decedent's death: | |
Basis at time of transfer | $30,000 |
less | |
Depreciation allowed under section 1016 before decedent's death ($800 * 5) | 4,000 |
| 26,000 |
Step 2. Value of property included in decedent's gross estate: | |
0.40180 (remainder factor, age 43) * $45,000 (value of entire property) | $18,081 |
Step 3. Uniform basis of property under section 1014(a), before reduction required by section 1014(b)(9): | |
Uniform basis (adjusted) prior to decedent's death | 26,000 |
Increase in uniform basis (determined by the following formula) | 7,634 |
Increase in uniform basis (to be determined) $19,000 (total appreciation, $45,000-$26,000)]= | |
$18,081 (value of property included in gross estate) $45,000 (value of entire property)] | |
| 33,634 |
Step 4. Uniform basis reduced as required by section 1014(b)(9) for deductions allowed prior to death: | |
Uniform basis before reduction | $33,634 |
less | |
Deductions allowed prior to decedent's death-taken into account under section 1014(b)(9) (determined by the following formula) | 1,607 |
Prior deductions taken into account (to be determined) $4,000 (total deductions allowed prior to decedent's death)]= | |
$18,081 (value of property included in gross estate) $45,000 (value of entire property) | |
| 32,027 |
Step 5. A's basis for the life interest at the time of the decedent's death, determined under section 1015: 0.59820 (life factor, age 43) * $26,000 | 15,553 |
Step 6. B's basis for the remainder interest, determined under section 1014(a): Basis prior to the decedent's death: | |
0.40180 (remainder factor, age 43) * $26,000 | 10,447 |
plus | |
Increase in uniform basis owing to decedent's death: | |
Increase in uniform basis | $7,634 | |
plus | | |
Reduction required by section 1014(b)(9) | 1,607 | |
| | 6,027 |
| | 16,474 |