do i owe capital gains taxes on a joint property when co-owner dies?

Question

I'm tenant in common with family member and will sell property after her death. I keep getting conflicting anwers about capital gains taxes.

Answer 1

If you're a Tenant in Common, whether or not you take full ownership will depend upon the her will. If she dies intestate, state law will determine who gets her share. A Tenant in Common does NOT automatically receive full title upon the death or the other joint owner.

Without knowing much more detail it's not possible to say what your tax situation might be. What your share in the property is, what the will says, how long you lived in the property all come in to play. If she wills her share to a 3rd party, you may not be able to sell the property at all.

Answer 2

I'm assuming that your family member has willed her share of the property to you, and that you each own equal shares of the property. She must will this half to you, you will not automatically get her half because you are tenants in common. This form of ownership has no rights of survivorship, so make sure a will is executed.

You need to figure out the basis of the property. This is usually just the original purchase price plus improvements to the property.

If the property is sold shortly after the death of the other owner, then the sales price of the property is equal to (or very close to) the fair market value of the property on the date of death (or date determined by the estate within six months after the date of death).

When you sell the property, you will have a capital gain on your half, which will be one-half the sales price minus one-half the basis of the property. You will have little or no capital gain on the inherited half, since its basis has changed to a "stepped up" basis, which is the fair market value on the date of death (or date determined by the estate within six months).

Further, if this property is your principal residence, and you have lived in it for two years during the five years prior to the sale, then you can exclude $250,000K of the gain on your half.

If it is not your principal residence, but you have owned your half for more than a year, then you will pay a maximum of 15% capital gains tax on your half, and little or no tax on the inherited half.

Answer 3

You don't owe capital gains until you sell the property. I would contact a tax attorney to protect my assets.

Answer 4

each and every cellular has DNA and that's consisted of two strands tightly woven around one yet another. the element that forestalls the two strands from breaking aside is named a telomeric cap (that's random nucleotide sequences called nonsense codons. Codon is a three sequence of nucleotides that codes for amino acids eg. CUU is a amino acid called proline . A nonsense codon is one that doesnt code for any amino acid production) each and each time your cells divide a small sequence is lost there by utilising lowering the steadiness of the cellular's DNA (in layman's words). this could at last lead do maximum of Ur cells' DNA starting to be to be risky. and usually whilst a mistake happens in DNA the cellular will carry out vehicle cytolysis (cellular suicide) to stay away from problems. So once you're previous maximum of ur cells telomeric caps would be low and that they are carriers to die whilst they attempt to divide.. Whats truly exciting approximately this thought is the effect it has on evolution (because of the fact this happens on the two meiotic to boot as mitotic divisions. meaning that a species grows previous too before it mutates.. yet thats a distinctive tale)

Answer 5

You should check with an tax lawyer. It depends how her will is worded (she could leave her half to someone else, you know!), how big or small her estate is, and what the probate laws are where the property is located.

Answer 6

Sorry, I misunderstood your question and I am now correcting my previous reply.

The matter is quite simple. As you are tenants in common, you are the owner of half the property. When the property is sold,you will be liable to capital gains tax if the property was not your principal residence and if your gain was above the exception limit.