A friend received about 7500 dollars,what is the law on taxes--came from sale of parents real estate
2006-12-21 16:23:15 · 4 answers · asked by ghillips2003 1 in Business & Finance ➔ Taxes ➔ United States
No income tax on inheritances - but the executor of the estate may send a Schedule K-1 for estate income earned after death.
2006-12-22 03:57:30 · answer #1 · answered by spicertax 5 · 0⤊ 0⤋
The estate would have been responsible for taxes on the increase in value up to the time of death. And on $7500, or even much more, there's no federal estate tax. That doesn't kick in until the estate's in the millions.
If the house was sold for $7500 more than its value at the time of death of the second parent, then yes, there would be taxes due on that, but they'd be capital gains taxes, not inheritance taxes.
Depending on the state, rules for state inheritance tax vary, so your friend would have to check on the laws in his/her state.
2006-12-22 00:46:13 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
If the money received was greater than the basis in the real estate, then a gain will have to be recognized by the taxpayer. The executor of the estate should know the basis in the real estate.
2006-12-22 00:34:58 · answer #3 · answered by Brian C 3 · 0⤊ 0⤋
Well below exemption for estate (which is the 1 that would have pd the tax if any) so no.
2006-12-22 11:43:10 · answer #4 · answered by vegas_iwish 5 · 0⤊ 0⤋