If you inherited a certain amount of money, but the money in tied up in property and the Executor of the will has not been able to liquidate the property, are you still liable to pay the inheritance tax even though you have not received anything yet?
2007-07-11 11:27:29 · 5 answers · asked by CJ 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
No. There is no inheritance tax on the property but there could be taxes owed when/if it is sold. If you sell a house that was inherited than you must use the date of death as the acquired date and the fair market value at the time of death, or the alternate valuation date if the Executor chooses it, as your cost basis. If you did not live in it for 2 years out of 5 years before the sale, than you pay capital gains taxes on the difference of the cost basis and the selling price. If you lived in it for the 2 years, than you could use the exclusion rule for the first $250,000 for single, or $500,000 for married. Either way, it is best to consult a tax professional for more detailed information and options.
2007-07-12 07:34:55 · answer #1 · answered by Anonymous · 0⤊ 0⤋
If you are a relative, chances are you will not have to pay any inheritance taxes. The laws changed just a few years ago giving a large amount of what different relatives can get, tax free. Wife - everything; siblings - a large percent. I'm sorry to be so vague. The direct answer to your question is you do not pay taxes on anything you have not received. At this point you don't even know what the amount will be until the property has been sold, right? You may not get what you think you are entitled to. I.E., if you Uncle left you and your sister each $50,000 and the property sold for $80,000, how can you get fifty? You can't. Don't loose sleep over this until you get the money in hand. (You're probably already loosing sleep from frustration of the estate not settling yet!) The executor is probably frustrated, too.
2007-07-11 12:30:09 · answer #2 · answered by DPL06351 5 · 0⤊ 3⤋
How can you pay taxes on something you don't have. If the executor has control of the property at this point it is the executor's problem and maybe it will have to come out of the estate. My guess is that you EXPECT to inherit but you do not have your inheritance yet. It's like expecting to pay taxes on your wages but you don't have a job yet.
2007-07-11 11:34:08 · answer #3 · answered by Anonymous · 0⤊ 1⤋
There is no Federal inheritance tax in the US. There is a Federal estate tax but this is paid by the estate, not the beneficiaries. The same hold true for state inheritance taxes in states that levy them.
There are still a few states with inheritance taxes. In most cases the taxes are paid by the estate. Even if the estate does not pay it, you will not have to until you actually receive the funds from the estate.
2007-07-11 11:38:54 · answer #4 · answered by Bostonian In MO 7 · 2⤊ 0⤋
specific - till you reside in it for a on an identical time as before you sell it. This makes it your important residing house, on which there is no capital effective factors tax. in spite of in case you do not stay in it before merchandising, you will ought to calculate the capital income. At this factor you are able to deduct evry penny you have spent on the residing house through fact it grew to become yours, so i'm hoping you have been protecting receipts, exceedingly for great products like refurbishment or extensions, legal expenses, close by council expenses for making plans permission or development inspection, upkeep, and so on and so on
2016-12-14 06:06:41 · answer #5 · answered by Anonymous · 0⤊ 0⤋