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    isterious's Avatar
    isterious Posts: 1, Reputation: 1
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    #1

    Jan 1, 2010, 10:52 AM
    ,NYS inheritance tax laws
    My mother & stepfather possess $400,000 in realestate,& $300,000 in cash. The Realestate was recently sold for one dollar to my "STEP BROTHER" ,born in wedlock to my mother & stepfather! My stepfather has 2 other sons,& there are 4 children from my mothers marrige to my father. Although the lions share of assets were given to the stepbrother,the$300,000 shall be split between us 4 children & the 2 other step brothers. The ? Is, is there a way to have sold the property & divided the will evenly ,WITHOUT BEING TAXED?
    cdad's Avatar
    cdad Posts: 12,687, Reputation: 1438
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    #2

    Jan 1, 2010, 11:01 AM
    Quote Originally Posted by isterious View Post
    My mother & stepfather posess $400,000 in realestate,& $300,000 in cash. The Realestate was recently sold for one dollar to my "STEP BROTHER" ,born in wedlock to my mother & stepfather! My stepfather has 2 other sons,& there are 4 children from my mothers marrige to my father. Although the lions share of assets were given to the stepbrother,the$300,000 shall be split between us 4 children & the 2 other step brothers. The ? is, is there a way to have sold the property & divided the will evenly ,WITHOUT BEING TAXED?
    Im a bit confused. You state $400,000 in real estate assets but then you say it was sold ? So that won't really apply so long as nobody has passed away. The separate standing issue is that having been sold for $1 sounds good but it isn't. Since it was a sale and not foreclosure then the respected party is due to pay taxes for the $399,999 at a much higher rate. ( big huge mistake ). As far as the rest of the assets ( cash value ) What should happen is that in the end the will should be probated and taxes are paid from that first before anyone else gets anything. Then with what is left over that remaining balance shall be split according to the instructions left in the will. There are ways of avoiding certain taxes through creation of a trust and a qualified estate lawyer could better advise you. Make no mistake if there is money to be found then the goobermint will try to take it from you.
    tickle's Avatar
    tickle Posts: 23,801, Reputation: 2674
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    #3

    Jan 1, 2010, 11:05 AM

    Are talking about another tax, cal, because according to Google there is no inheritance tax in NYS.

    Tick
    cdad's Avatar
    cdad Posts: 12,687, Reputation: 1438
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    #4

    Jan 1, 2010, 03:10 PM

    There may be a U.S. tax that is applicable here because of the size of the estate. That's why the warning about the totals and the house being sold for $1 won't fly.
    ScottGem's Avatar
    ScottGem Posts: 64,970, Reputation: 6056
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    #5

    Jan 1, 2010, 03:24 PM

    First, there is no inheritance tax. There are estate taxes when the estate exceeds $2 million. But such taxes are paid by the estate prior distribution.

    Second, if a $400K property was sold to the step brother for $1, there are going to be significant tax problems. Essentially, when a property is sold for a lot less than fair market value, the difference may be considered a gift. So that $300K is going to have to be used to pay gift taxes. As Califdad said, this transaction was a big mistake.

    As for any cash assets distributed after the estate is processed, there will be no taxes since the estate is under $2 mil.

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