THE REVERE ADVOCATE – FRIDAY, DECEMBER 6, 2024 Page 17 RSCHP/Revere History Museum holiday event — 2024 holiday ornament T he Revere Society for Cultural and Historic Preservation (RSCHP) is proud to announce our 2024 ornament: Bluebeard’s Palace, one of the most iconic attractions of old Revere Beach, can now grace your tree! This will be on sale for $30 at our holiday gathering at the Revere History Museum on December 8 from 12-3 p.m. Guests on the 8th can also be among the fi rst to buy tickets for our Giggles fundraiser on January 23. And perhaps most importantly, for the fi rst time in a long time, guests will be able to visit our newly renovated exhibit rooms! Trust us when we say that they are looking incredible, and even people who have visited the museum many times will feel like they are walking into brand-new spaces. We hope to see everyone at the museum on the 8th! LINDERME AND GWYNN ESTATES: IMPLIED LIFE ESTATES T he tax court case in Linderme v. Commissioner, 52 T.C. 305 (1969) clearly states that the value of real estate can still be includable in the decedent’s taxable estate even if there was no actual reserved life estate on the deed itself. For example, if a 90 year old man deeded his home to his 3 children and reserved a life estate on the deed itself, the fair market value of the real estate would become the new cost basis going forward in the names of the three children. The reserved life estate on the deed itself leaves no question as to whether or not the home is to be included in the gross estate for estate tax purposes. Once included in the gross taxable estate, the step-up in cost basis is achieved thereby providing for the new cost basis to be equal to the fair market value of the home at the time of death. When there is no life estate language on the deed itself, you have to look at the facts and circumstances along with the Linderme case and the Gwynn case (437 F.2nd (4th 1148 Circuit, 1971) in order to determine if the home would still be includable in the gross taxable estate. So long as the fair market value of the home is not greater than $2million, and assuming there are no other assets owned at the time of death, there would be no Massachusetts estate tax to be paid. Certainly no federal estate tax with the new $13.99million exemption amount as of 1-1-25. If the children sell for $2million, they would pay no capital gains tax as well. Therefore, as part of an estate plan/tax plan, we want the value of the home to be includable in the taxable estate of the decedent. The reason is that once the property is included in the taxable estate, under Internal Revenue Code Section 1014(a), we can achieve a step-up in cost basis equal to the fair market value at the time of death. It’s as if the children paid $2million for the property thereby resulting in no capital gain upon a subsequent sale. In the Linderme and Gwynn cases, there was no reserved life estate on the deed itself. The court found that there was an understanding on the part of all parties that the parent was to live in the home until death. The parent lived in the house rent free until the date of death. None of the children resided in the house with the parent. In the Linderme case, the father paid all of the monthly operating costs such as real estate taxes, water and sewer, homeowner’s insurance, repairs, etc., until the day he moved to a nursing home. At that point in time, the home remained vacant. While in the nursing home, the son continued to pay the monthly expenses with the father’s own money. Upon the death of the father, the house was sold, estate bills were paid and the net proceeds were split among the three children. The Judge ruled that the decedent retained the possession and enjoyment of the home until the day he died. The Judge found that there was indeed an understanding of all parties that this was the case. He found that the value of the home should be includible in his taxable estate under Internal Revenue Code Section 2036(1)(a). The decedent had exclusive possession of the home. There are times when you really want the real estate to be includible in the taxable estate so that a very large future capital gains tax can be avoided. These are two court cases to keep in mind in order to avoid, or greatly minimize, any future capital gains tax. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. Copyrighted material previously published in Banker & Tradesman/The Commercial Record, a weekly trade newspaper. It is reprinted with permission from the publisher, The Warren Group. For a searchable database of real estate transactions and property information visit: www.thewarrengroup.com BUYER1 Enrique, Santiago Lopera, Ana M REAL ESTATE TRANSACTIONS SELLER1 BUYER2 Mares, Julia R Ruiz, Fernando N Edwards Forence P Est Sixth Fratello Rt SELLER2 Edwards, Peter D Visconti, Nino ADDRESS 67 Delano Ave DATE PRICE 11.12.24 525000 98 Winthrop Pkwy 11.13.24 740000 Revere
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