I would like to add inherited property - real estate, both undeveloped and developed properties - into my plan. IRAs are covered extensively, I have looked in the documentation for inherited property and I have tried adding it into the Property tab, and come close, but the assets are not correctly reflected.
If I set the date of acquisition in the future, the 'cost basis' is not correct, creating a cash requirement, so as a work around I tried pre-dating the acquisition, and set the costs to start in a future time period (but this requires either it's own time period or must be placed arbitrarily in a future, existing time period), however, this causes the asset to be reflective in my current net worth, not my future estate (a minor issue).
Have I missed something or is there a better way to reflect future, non-IRA inheritances?
@slaufer There is no specific provision for the modeling of inherited property. My best thought about how to do it is to add it to the Property Expenses page and make the date of acquisition equal to the date of inheritance, and market value to the fair market value of the property (which, I think, will become your cost basis for an inherited property). Then, to offset that cost in the model, go to the Income page and add a non-taxable windfall in the year of the inheritance with the amount the same as the market value of the property in then-year dollars (because windfalls are specified in future dollars). That will result in a net zero cost to put that property into your net worth.
Stuart
@smatthews51 Thank you. I had forgotten about the windfall section. Is there a way to include inflation? I would like to keep the property on par with inflation, can that be done, rather then depreciated over time?
Just checking, after applying the updates recommended, the data seems correct, there are increased entries in the expenses for personal property, total expenses and total income categories. Is this correct?
@slaufer The appreciation of the property will be kept on par with general inflation unless you add some value to the Real Appreciation Rate field on the property page. You can verify this by looking at the value of the property in the years after it is inherited. It sounds like the recommendation is working correctly; you should see an increase in expenses and total income categories when the inheritance occurs.
Stuart
