Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-3-6 - GAIN OR LOSS - BASIS OF PROPERTY; ADJUSTED BASIS
Section 810-3-6-.16 - Basis Of Property Of Individuals Establishing Alabama Domicile
Current through Register Vol. 42, No. 11, August 30, 2024
(1) Effective for tax years beginning after December 31, 1997, the basis of both real and personal property owned by an individual on the date Alabama domicile is established shall be the same basis as is used for federal income tax purposes on that date.
(2) Example 1: Taxpayer owns an IRA for which all contributions made were deducted from the taxpayer's income for federal income tax purposes. The taxpayer establishes Alabama domicile on January 1, 1998. The basis for the IRA for Alabama income tax purposes is zero, upon the establishment of Alabama domicile.
(3) Example 2: Taxpayer owns a truck with an original cost of $100,000 and an adjusted basis of $80,000 as of December 31, 1997. On January 1, 1998, the taxpayer establishes Alabama domicile. The adjusted basis in the truck for Alabama income tax purposes is $80,000, upon the establishment of Alabama domicile.
Author: Ed Cutter, CPA
Statutory Authority: Code of Ala. 1975, §§ 40-2A-7(a)(5), 40-18-6.
