Truvntg
May 23, 2009, 02:50 PM
Good Day!
My father-in-law recently passed away leaving a two family home to my wife and brothers-in-law. (No liens. No mortgage.)
The home was purchased some 37 years ago for $43,000.00. The current appraised value is $525,000. Will they have to pay capital gains taxes on the property once it is sold? If so, at what rate?
Thank you!
[email protected]hkstroud
May 23, 2009, 03:52 PM
No, your wife and brothers inherited a property of a certain value (appraised at $525,000). That is a gift. Should you sell that property some time in the future for more than its value at the time you inherited, you will have to pay capital gains on the difference. So get it appraised now for as much as you can.
AK lawyer
May 24, 2009, 08:18 AM
No, your wife and brothers inherited a property of a certain value (appraised at $525,000). That is a gift. Should you sell that property some time in the future for more than its value at the time you inherited, you will have to pay capital gains on the difference. So get it appraised now for as much as you can.
Absolutely correct. Inheritance is a "taxable event"; or in other words a time at which the tax basis of the property is adjusted.
If, in your area, assessed value is not considered reliable, especially if it is normally significantly lower than actual value, get it appraised. A full formal appraisal is normally somewhat expensive; so if you are uncertain whether to go that route, at least get a letter of opinion from a realtor.