Ask Experts Questions for FREE Help !
Ask
    joeblow00's Avatar
    joeblow00 Posts: 4, Reputation: 1
    New Member
     
    #1

    May 20, 2018, 05:35 AM
    Taxes
    Hi.my wife's father passed away and she inherited his house in lockport ny and plans on selling it.its worth about $70000.my question is does she have to have to pay any taxes on it?thanks
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
    Expert
     
    #2

    May 20, 2018, 10:33 AM
    Probably not. Upon inheriting the house its cost basis is automatically stepped up to the market value as of the data of death of the decedant. If after selling the house she nets more after expenses of selling than that cost basis, then she will have to report the difference as a capital gain (I'm assuming that the house has NOT been her principal place of residence for at least two of the past 5 years). But if she is quickly "flipping" the property upon inheriting it, then it's highly likely that the cost of selling it (such as sales commission, cost of any remediations that must be done in order to sell it, any real estate transfer taxes she may have to pay, etc) will make the sale a net loss, and hence no taxes would be due.

    Please note I have not broached the subject of any estate or inheritance taxes that may be owed by the estate or by your wife, respectively. Most states do not have inheritance taxes, but a few do, and the rules vary by state.
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
    Uber Member
     
    #3

    May 20, 2018, 03:24 PM
    Concise answer from ebaines. I would also have a real estate broker get you a fair market value in writing. IRS won't take what it's "worth about".
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #4

    May 20, 2018, 10:41 PM
    All what ebaoines has said is true.

    My two cents is that the sale of the house MAY have to be reported NOT on your mother's return, but rather on a fiduciary return filed by the estate executor. The proceeds are then issued to the heir (your mother).
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #5

    May 20, 2018, 10:54 PM
    All what ebaoines has said is true.

    My two cents is that the sale of the house MAY have to be reported NOT on your mother's return, but rather on a fiduciary return filed by the estate executor. The proceeds are then issued to the heir (your mother).

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Paid internship no taxes being withheld from paychecks. What taxes am I liable for? [ 13 Answers ]

Location: Ventura County in California. Been interning for a couple of months designing home décor and assisting the Merchandising Department. I get paid $1000 monthly and zero taxes are being withheld from my paychecks. This is the first year my parents won't be able to claim me as a dependent....

Taxes owed on inherited home sold by land contract. Do I pay taxes on interest. [ 1 Answers ]

I am selling a inherited home by land contract. Do I pay taxes on interest. No gain on value of house

How to file taxes when paid by check but employer did not withhold taxes [ 3 Answers ]

I work for a small business and they do not have me on the "books" - meaning they are not paying pay roll taxes or deducting taxes from my paycheck. They pay me every two weeks by check. I'm worried now I have been here for a year and it's time to file my taxes. I do not have a W2 form with them...

Taxes on wire transfer in excess of $100K from India to US to self-any taxes? [ 2 Answers ]

My father is an Indian, acquired his green card due to the death of our mother in 2008, and is trying to wind up affairs in India... he wants to transfer his money from an Indian account to a US account. Does he need to declare his Indian income to the IRS, if yes, then above what level? If he...

Filing Federal Taxes Jointly and State Taxes Separately [ 1 Answers ]

My husband and I are both on Active Duty in the Military, and we were married in May of this year so this will be the first year filing Jointly. Is it sensible to file joint federal taxes and separate state taxes this year (Wisconsin and Maryland) even though we are both stationed and living in...


View more questions Search