Basis of inherited property

[Jon Pinkerton]

My wife inherited her mothers home when she passed in October 2017.    The home is going to become a rental property.   I understand that the basis on which depreciation will be calculated is based on the fair market value at the time of her passing.     Can I use the zillow zestimate as the basis?   Looks to be pretty accurate and I can look back in time to get a value?

[Ashish Acharya]

Originally posted by @Jon Pinkerton:

@Ashish Acharya if I could follow up with another question... I am on track to establishing the tax basis of the property when my wife inherited it in 10/2017. Since then, I have been fixing up the property getting ready to rent. Paint, flooring, etc. I have not yet put the property “in service” as a rental property as it is not yet advertised for rent. Do I need to calculate a new basis once the property is placed in service as rental property and use that figure when I depreciate for taxes? I feel like I am treading in CPA waters. Might be a good time to bring one on to make sure all is set up properly

 Yes, most of the work done before making it ready for rent is added to the basis of the property . 

So, you would tasks the FMV at the date of death and add the work you have done. Do not forget to take out the value of the land when you calculate depreciation.