Income Tax Basis for a Remainder Interest

Abstract

<p>Although less common than a half century ago,<strong>1 </strong>it is not at all unusual to see use made of legal life estates and remainders, not to mention life estates and remainders in trust. A major concern is what is the income tax basis for a remainder and what happens if the holder of the life estate predeceases the remainder interest holder? Is the holder of the remainder interest entitled to receive a new income tax basis at death?</p>