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    jennyd's Avatar
    jennyd Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jul 14, 2009, 07:47 PM
    Will says sell mom's house and split between children is this cash taxable? $66,700
    I have gone through the probate court and paid all of my mother's bills
    and anything she owed to anyone. Her will stated her home must be sodl and the
    money be split between her four children. We sold her home
    at full appraisal value and are now ready to split the money between
    her four children. There is no money left in her estate, all bills have been paid,
    and all that is left is the money from the sale of her home. Is this cash
    taxable for any of the children. It is $16,400 per child.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Jul 15, 2009, 01:24 AM

    There is no federal tax on inheritances. Most of the states do not tax inheritances. For your state, check at the state web site.
    Even if the state taxes inheritances, there may be exemption for this amount.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Jul 15, 2009, 10:41 AM
    There are also no federal or state estate taxes due to the low amount in the estate.

    Distribute the money, as no taxes are due.

    However, check with a local tax professional with estate tax expertise, because a fiduciary return (Form 1041) may be needed to properly account for the sale of the home.
    jennyd's Avatar
    jennyd Posts: 2, Reputation: 1
    New Member
    		  
    #4

    Jul 15, 2009, 05:36 PM
    Quote Originally Posted by AtlantaTaxExpert View Post
    There are also no federal or state estate taxes due to the low amount in the estate.

    Go ahead and distribute the money, as no taxes are due.

    However, check with a local tax professional with estate tax expertise, because a fiduciary return (Form 1041) may be needed to properly account for the sale of the home.

    Thank you so much. Does the person handling the estate have to file the 1041 for the sale of the house?
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #5

    Jul 16, 2009, 07:24 AM
    Yes, because the house, as an estate asset, is NOT a personal home that is exempt from taxation on the capital gains.

    I suspect that the house did NOT appreciate in value in the time between your mother's death and the date of the sale, but it might have. That is the reason the Form 1041 needs to be filed, to accurately account for any capital gain (or loss) on the sale.
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