Help with Death and Taxes in Maryland?

Question

My brother died in October and did not have a will. The condo he had and mortgage was in his and my father's name.They bought it for $65,000. My father is still alive and we are selling the condo for $204,500 or less in the next tax year that he didn't die. What is my father's responsibility for the capital gains - half? What happens to my deceased brother's half? And how do I file this condo tax wise - on the estate tax return or my father's. He didn't have enough money for estate tax.

Also, my parents are getting my brother's Thrift Savings Plan (401k) proceeds. What are their resonsibilities tax wise on that?

I am trying to avoid going to the tax man so if there is any help here, would appreciate it. It is really a simple estate and not much to write off other than this.

Answer 1

1. Dad inherited from brother, so Dad has a split basis, 1/2 is $32,500 and 1/2 is 102,250 (assuming a fair market value of $204,500 as of Bro's death).
2. Dad pays capital gain on the difference between the sales price and Dad's combined basis of $134,750.
3. Condo tax? Is that Maryland? You have to ask that tax agency.
4. Parents pay regular income tax on the withdrawals from the 401K. Ordinary inc.
5. Add up 401K, value of condo, insurance, bank accounts, stocks and everything else before being sure that there is no fed estate tax.
6. I don't know if there is a Maryland estate or death tax. Check the Maryland state revenue or tax department web site.
7. Don't be afraid to call them. They won't audit you just because you called to ask a question.

Answer 2

on account which you're on the deed, you will not have an inheritance tax, on account which you're already the landlord. i think of you may inherit as much as $600000 without paying inheritance taxes. Interfamily transferres have particular tax consideratons too. basically once you sell it, you wil be assessed the capital valuable factors based on the cost of the residing house once you obtained it. in the event that they take the valuables decrease back and positioned it in a revocable have confidence, they could call you as trustee and you gets the valuables at their decrease foundation, and then once you sell it's going to be much less capital valuable factors. The down area of this arrangment is that if something occurs to considered one of your mothers and dads and the different one remarries, they could exchange the have confidence, and you're able to be left our thoroughly if the hot significant different needs it that way. you additionally can purchase it outright out of your mothers and dads as you seem to desire to do, even nonetheless once you sell you is frequently assessed taxes based on the present marketplace cost, no count what you got it for.