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Posted: 4/10/2017 4:54:24 PM EDT
My mother passed away this last January.  Her house was paid in full and she left my sister 50% and my brother and I 25% each of the houses ownership.

My brother intends to buy us out and move into the house, no problem there. When this happens later this year how does the sale of my portion affect my taxes?  

I've tried to look it up but maybe I'm looking in the wrong place.  If I needed a CPA this year I would ask him but my taxes are fairly easy but next year?

If my brother was to move in and pay us rent till he can buy it will this muddy the waters even more?
Link Posted: 4/10/2017 5:10:34 PM EDT
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Link Posted: 4/10/2017 5:58:04 PM EDT
You received a "stepped-up" basis when you inherited the property. If you sell it for its appraised value in your mother's estate, you won't have any taxable income.

Consult a CPA, however.
Link Posted: 4/10/2017 6:53:11 PM EDT
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Quoted:
I believe anything under 5 million is exempt from estate taxes.
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Federal estate tax, yes.  And it's currently $5.49M per person so a married couple can, via an A-B Trust split a large estate into two parts to exempt just shy of $11M.

State estate and death taxes, depends on the state; some have relatively low thresholds for both (i.e. $100K).

Someone should get the house appraised ASAP; you are allowed to "step-up your basis" which means you inherit it at the current value (basis).

When you sell it you pay income taxes on the difference between your new basis (value at time of inheritance) and sale price.

Depending on the value of the home and your income, you may also get the privilege of paying a) Medicare Surcharge (0.9%) and b) Net Investment Income Tax (3.8%); both are on income over $125k MFS, $250k MFJ.

Maybe you do need a CPA after all.
Link Posted: 4/11/2017 11:11:53 AM EDT
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Link Posted: 4/11/2017 10:36:10 PM EDT
Thanks for the info, I will talk to a CPA.

Since I'm only getting 25% of the house which is about $25k it doesn't look like I'll have a lot of profit to worry about since prices are kind of stable and I don't think I'll see a big difference between appraisal and selling price.

Thanks again, time to look at CPAs.
Link Posted: 4/18/2017 7:53:25 AM EDT
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Quoted:
Thanks for the info, I will talk to a CPA.

Since I'm only getting 25% of the house which is about $25k it doesn't look like I'll have a lot of profit to worry about since prices are kind of stable and I don't think I'll see a big difference between appraisal and selling price.

Thanks again, time to look at CPAs.
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This is the way I understand it.  If the house was worth $100,000 at the time of death, and the sale price is $100,000, then the price is not different and the capital gains are $0.  

The only thing that would apply would be if there are state inheritance taxes for the portion of the home that you originally inherited.  

Again, see a CPA, but it all sounds right.
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