Page 24 THE EVERETT ADVOCATE – FRiDAy, JunE 30, 2023 LIFE ESTATES AND STEP UP IN COST BASIS O ne common dilemma facing the remaindermen listed on a deed is how to calculate the cost basis of the real estate in question upon the death of the life tenant or life tenants. This is an important issue as the remaindermen need to know their cost basis in the event they subsequently sell the real estate or rent it out thereby requiring depreciation calculations. If, for example, a father deeded his home to his two children and reserved a life estate on the deed itself (essentially the right to use, occupy and possess the home for the rest of his life), upon the father’s death, under Internal Revenue Code (IRC) Section 2036(a)(1), the fair market value (FMV) of the home at the time of the father’s death would be the starting cost basis in the hands of the children going forward. If the FMV of the home was $600,000, the law treats it as though the children paid $600,000 for the home. This of course helps tremendously to avoid or greatly eliminate any capital gains tax upon a subsequent sale of the home. What if the father and mother both deeded the home to the father’s death and add that figure to 50% of the FMV of the home upon the mother’s death. Furthermore, 50% of the FMV of the home would be includible in the taxable estate of each spouse upon his or her death. What if the father and moththe children with reserved life estates? In this situation, since the father deeded his 50% interest in the home to the children with a reserved life estate, upon the father’s death, only 50% of the property is steppedup to FMV upon his death. Since the mother deeded her 50% interest in the home to the children with a reserved life estate, upon the mother’s death, only 50% of the property is stepped-up to FMV upon her death. As a result, the home would have to be valued at both the father and mother’s death in order to obtain the new cost basis in the hands of the children upon the second to die. You would take 50% of the FMV of the home upon er reserved a life estate, as husband and wife, tenants by the entirety? Would that make a difference in the calculation? The answer is no. Upon the father’s death, he in essence gifts his life estate to his wife. This is referred to as a life estate pur autre vie. Upon the subsequent death of his wife, there will not be a step-up in cost basis of the husband’s 50% life estate given to her as she simply did not retain a life estate in 100% of the home. She only retained a life estate in the 50% that she originally gifted to the children. She did not retain a life estate in the husband’s 50% interest. Only he did. This is pursuant to IRC Section 2036(a)(1) dealing with retained interests. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. CITY OF EVERETT - LEGAL NOTICE - ZONING BOARD OF APPEALS 484 BROADWAY, ROOM 24 EVERETT, MASSACHUSETTS 02149 To Whom It May Concern: This notice is to inform you that a public hearing will be held on Monday July 17, 2023 at 6:00 PM, Everett City Hall, 3rd Floor George Keverian Hearing Room. All interested parties may attend and opinions will be heard regarding the following petition. Whereas a petition has been presented by: Property Address: Map/Parcel: Zoning District: Permit Number: 20 Pleasant Street C0-05-000063 Dwelling B-23-364 Person Requesting: Ms. Claudia Kasper 20 Pleasant Street Everett, MA 02149 REASON FOR DENIAL: The applicant seeks to convert the existing 1 (one) family residence built approximately in 1894 into a 3 (three) family residence Violation and Zoning: • Pursuant to Section 4.B.2.c of the Zoning Ordinance, the maximum allowable floor area ratio (FAR) is .50. The proposed FAR is .71. A variance is required. • Section 17.I of the Zoning Ordinance requires each parking spot to be at least 9’ x 18’. The proposed parking spaces in the rear yard are 8.5’ x 18’. A variance is required. • Section 17.O.5 requires a minimum driveway width of 18’. The existing structure is 17.8’ from the side lot line, and the proposed driveway appears to be less than eighteen feet wide. A variance is required. MARY GERACE - Chairman Roberta Suppa - Clerk of the Board of Appeals June 30, July 07, 2023 1. On June 30, 1864, President Lincoln signed the Yosemite Valley Grant Act to protect the area; what Yosemite Board of Commissioners member was a landscape architect who died in Belmont, Mass.? 2. The Los Angeles Dodgers’ name comes from the need to dodge what? 3. What vegetable has the most water? 4. the official National March of the USA? 5. ZIP Code, which stands for what? 6. In 1987 what John Philip Sousa march became On July 1, 1963, the U.S. Postal Service began The Grand Banks are closest to what island? 7. What popular song is Georgia’s official state song? 8. On July 3, 1996, the British Prime Minister announced that the Stone of Scone would go back to Scotland; what is the stone used for? 9. In the 1600s what beverage in Europe was so expensive that it was kept locked in wooden boxes? 10. What is the more common name for Liberty Enlightening the World? 11. On July 3, 1878, what songwriter of “Yankee Doodle Dandy,” “Give My Regards to Broadway” and “You’re a Grand Old Flag” was born? 12. Where would you find the largest tortoises? 13. What document does July 4th commemorate? 14. On July 4, 1804, what author was born in Salem, Mass.? 15. What kind of similar buildings would you find in Dubai, Kuala Lumpur and Shanghai? 16. What French playwright of “The Doctor Despite Himself” and “The Would-Be Invalid” said, “One must eat to live, not live to eat”? 17. On July 5, 1971, the 26th Constitutional Amendment was certified, granting voting rights to those of what age? 18. Do centipedes have 100 legs? 19. What food is known as a hand? 20. July 6 is National Fried Chicken Day; reportedly, in the 1930s the Chicken and Waffles dish was created in what locale? ANSWERS 1. 2. Frederick Law Olmstead Electric trolleys (In 1896 the team was named the Brooklyn Trolley Dodgers.) 3. Cucumber 4. “Stars and Stripes Forever” 5. Code 6. Newfoundland 7. 8. Coronations 9. Tea 10. 11. “Georgia on My Mind” The Statue of Liberty George M. Cohan Zone Improvement Plan 12. 13. The Galápagos Islands Declaration of Independence 14. Nathaniel Hawthorne 15. World’s tallest skyscrapers 16. Molière 17. 18 or older 18. No; they have varying numbers of legs (although “centi” means hundredth or hundred). 19. A cluster of bananas 20. Harlem, N.Y.
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