The house has been in my family for two generations (I don't know if that makes a difference).
Any guidance would be greatly appreciated, and if I missed any "key info" above, please answer me with what I missed and I'll try to add it in.
Thanks again!
2007-12-12 12:38:54 · 10 answers · asked by nicolemcg 5 in Business & Finance ➔ Taxes ➔ United States
Inherited property has as its tax basis the fair market value as of the date of death of the former owner. If it had a fair mkt value of $10M and you added $ 3M improvements over the year and sold it for $ 15M you would have a capital gain of $2M. Your tax would be whatever tax rate applied at that future date times the $ 2M profit.
2007-12-12 12:56:16 · answer #1 · answered by Anonymous · 3⤊ 0⤋
If you inherited it, your basis isn't the zero you paid for it, it's what it was worth when the person died that you inherited it from. You subtract your basis from the selling price, subtract allowable expenses. and pay tax on the rest. So there's no way from the info you provide to have any idea of what your taxes would be.
2007-12-12 13:08:47 · answer #2 · answered by Judy 7 · 4⤊ 0⤋
There are two components here:
1. You have to pay estate taxes on the inheritance at the fair market value at the time of death.
2. You have to pay capital gains taxes at the time of sale for the profit you made on the house. The profit would be 15M-the fair market value at the time of death.
2007-12-12 13:10:43 · answer #3 · answered by professortvz 3 · 2⤊ 2⤋
She could have a situation. a severe one. If her mom and dad quitclaimed the domicile to her, it somewhat is a present and her foundation interior the home is even if their foundation grew to become into or the value on the time of the present, whichever is decrease. whilst in comparison with modern housing fees, that could be VERY low in the event that they offered it an prolonged time in the past. thus, she could have a tax criminal duty. How lots tax she owes will remember upon how long she owned the domicile or maybe if if or no longer she lived in it as her important place of abode mutually as she owned it. you haven't any longer offered sufficient tips that could assert how lots the tax may be. Had the domicile particularly been transferred to her during the mum and dad' aspects(s), her foundation may be even if the value grew to become into on the date of the final mom and dad dying. She'd basically owe taxes if she bought it for greater effective than that value AND it would be dealt with as an prolonged-term capital income in spite of how long she owned it. the value for long-term capital helpful aspects caps out at 15% and may be as low as 0%. Edit: The pal may be maximum appropriate or may be incorrect; there is not any longer sufficient tips that could assert. in case you sell your guy or woman place of abode and owned and lived in it for no less than 2 of the 5 years right this moment only before the sale you could exclude as much as $250k in income if single or $500k in income if married submitting mutually from any capital helpful aspects tax. in case you do no longer meet the two twelve months requirement then the completed income is often taxable. it is likewise taxable in case you have used the exclusion interior of one twelve months of using it on yet another place of abode. There a pair of exceptions that supplies you with a expert-rata exclusion, alongside with if the reason of the sale grew to become right into a job substitute or an ailment that compelled you to sell your domicile.
2016-11-26 02:51:14 · answer #4 · answered by ? 4 · 0⤊ 0⤋
Laws change. I can't see 20 years into the future. They will have either closed all the loopholes or have a bunch of new ones. Ask the same question 19 years from now
2007-12-12 12:43:05 · answer #5 · answered by Anonymous · 0⤊ 3⤋
I know now in our time that you can sell a one house every 2 years (with profit, and without reinvesting ) and not have to pay income tax on the money but with tax laws with inheritence i am not sure about that i know you have to pay tax on inherited property and money
2007-12-12 12:49:25 · answer #6 · answered by d s 3 · 0⤊ 4⤋
If u did not pay inheritance taxes because you lived in the house...you're gonna pay lots for the mistake of selling!!!!!
Renting it out would be a better option!
2007-12-12 12:48:00 · answer #7 · answered by Carol (Yeah I said it!) G. 4 · 0⤊ 3⤋
given todays tax laws u will owe based on orginal value . 1st purchaser.
contact the IRS for real answer.
2007-12-12 12:53:48 · answer #8 · answered by Anonymous · 0⤊ 3⤋
Rich *****. haha. With something that pricey you should really see a financial advisor. Not someone on yahoo.
2007-12-12 12:43:12 · answer #9 · answered by Sarah 3 · 0⤊ 3⤋
yes
2007-12-12 12:48:26 · answer #10 · answered by THE CROP KICK CHICK 4 · 0⤊ 3⤋