Reply
Trusted Contributor
Posts: 1,182
Registered: ‎07-18-2010

Thank you all for the info provided. Yes, I will definitely be seeking the advice of a professional before moving forward.

 

Based on what I've read here I now know that  taxes will be based, in part, on the value of the home at the time it was inherited. That gives me a better understanding of what to expect.  

Honored Contributor
Posts: 15,344
Registered: ‎05-01-2010

@Sooner wrote:

@LuvSoCal The govt. thinks you've inherited a bundle and they need more money to give away, so why not yours?  They are very free with money as long as is coming from your pocket.  They are so nice.


@Sooner I've been paying capital gains on stocks that were inherited since the late sixties. Didn't matter who was in charge, they all wanted my money and still do after all these years. 

Respected Contributor
Posts: 2,547
Registered: ‎02-16-2019

If you do a 1030 exchange and buy something else I think that will keep you from paying taxes but I would see an attorney also for the inheritance part you may not owe as much as you think.  When my parents died and we sold their home we didn't pay taxes but it was nowhere near that amount 20 years ago.

Respected Contributor
Posts: 2,206
Registered: ‎09-18-2010

There are two tax basis:  Federal and State.  Federal tax for Capital Gains regarding real estate are based on estate value of home at time of death less market value at time of sale less any and all capital improvements.  Anything over 250,000.00 profit is taxable as capital gains.

 

You need to speak to a tax expert.  You have two pieces of property. he would be the best to tell you what is the most advantageous way to reduce your capital gains.  It might be to sell your condo and then wait 2 years or 3 years to sell your inherited property.

Respected Contributor
Posts: 4,612
Registered: ‎04-05-2010

We retired this year, and sold our office building. We were surprised that to AVOID capital gains taxes, we would have to invest the money in COMMERCIAL property again which we would have had to rent out.  We expected to invest the money for our retirement, but have zero desire to be landlords. I thought this was grossly unfair, since we were retiring, not relocating.

 

Thankfully, we have a wonderful accountant who helped us out. Still had to pay the taxes, of course, but less than we thought, by a good margin.

Honored Contributor
Posts: 32,482
Registered: ‎03-10-2010

@proudlyfromNJ wrote:

@Sooner wrote:

@LuvSoCal The govt. thinks you've inherited a bundle and they need more money to give away, so why not yours?  They are very free with money as long as is coming from your pocket.  They are so nice.


@Sooner I've been paying capital gains on stocks that were inherited since the late sixties. Didn't matter who was in charge, they all wanted my money and still do after all these years. 


@proudlyfromNJ You are so right! They all want it, some more than others, but they all want it.  It should have been done away with long ago, and especially since inflation has made it a burden on so many more of us average citizens.

Super Contributor
Posts: 328
Registered: ‎05-01-2011

She really need to find a good tax consultant who is familiar with real estate laws. I do know that after her deductions including taxes she maybe taxed less. She really need to fine the fair market value of that house and look to see what the house was appraised for when she inherited it. The difference between the two will let her know what her capital gaines will be, just saying a figure really don't determine that until all the figures are accounted for. 

Valued Contributor
Posts: 586
Registered: ‎01-20-2022

They should have put your name on the home before they died. This would have eliminated this entire problem.

 

Talk to an attorney or banker. This really isn't the appropriate forum. 

Honored Contributor
Posts: 8,736
Registered: ‎02-19-2014

You need an accountant. A proactive one who knows to explain these things to you before you run into avoidable problems.

 

One thing our system is set up for is tax avoidance. That is, provided you have the funds and street smarts to pay a decent accountant/lawyer.

 

Your request that someone explain taxes to you as they relate to funding government seems like an invitation to discuss politics with you. Not interested.

When you’re accustomed to privilege, equality feels like oppression.
"Power without love is reckless and abusive, and love without power is sentimental and anemic." - Dr. Martin Luther King Jr
Esteemed Contributor
Posts: 7,630
Registered: ‎08-19-2014

@PhillyGirl23 wrote:

They should have put your name on the home before they died. This would have eliminated this entire problem.

 

Talk to an attorney or banker. This really isn't the appropriate forum. 


I'm sorry to say that's incorrect. My mom put my name on her house before she died. When she passed ,I already owned the house & I owed taxes on the full value of it when I sold it.The only savings I had were the capital improvements that had been made.

 

 If I had inherited the home, I would have only owed taxes on the difference between its value on the date of sale & the value on the date of death. In addition I would also have been able to claim the capital improvements.