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Sale of Rental - iJoint Bank Account - Inheritance Tax?
We bought a house in 2001 and have had it rented out since then. We bought for $157,000 and it is now valued at $550,000.
1) If we sell our rental and put the remaining proceeds in a joint bank account with our two adult children, does the money have to go through probate if both my wife and I pass away? (Do they have immediate access to the proceeds?) 2) Are the proceeds subject to inheritance tax? |
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1) You will have to pay capital gains on the house, as it is considered a business property, NOT a primary residence eligible for the $500,000 tax exemption.
2) No other taxes will be due. If you give your adult children equal axxess, it would be considered a gift, and a gift tax return would have to be filed. However, you would access your Unified Credit (the credit given as part of the estate tax return) to exempt any taxes due. |
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