QUESTION
Any refund on inheritance tax paid on Real Estate between the estimated price and sold market price difference on tax paid?
Asked on Sep 11th, 2012 on Estate Planning - Michigan
More details to this question:
Any refund on inheritance tax paid on Real Estate between the estimated price and sold market price difference on tax paid? With both of my parents deceased. My father the last to past was in 12/09. Inheritance tax was filed within 3 months for the inheritance tax discount. My question pertains to the Real Estate portion "house" my parents owned. I use the estimated assessment tax cost with preparing the PA inheritance tax. The house recently sold $147,000 in 6/12. It was in need of updating to prepare it for market. It needed 10K in improvements, new kitchen and bath. I use an estimated cost basis of $150,000 when preparing the PA inheritance taxes. Amongst improvements, during the 30 month period there was utilities, taxes, insurance and closing costs. Can I request a refund for the difference between the assessment price filed on tax paid and the actual market price sold, along with any expenses with maintaining before sale.
7 ANSWERS
Neal Michael Rimer
Normally, your tax basis and additions to basis only have an effect on your gains and losses upon sale for income tax purposes. I have no idea what the tax is in PA for inheritance. I don't know its significance... but, if you take the tax loss from the sale I'm guessing that you might be OK. I presume you got a step up in basis upon your father's death to fair market value.
Answered on Sep 13th, 2012 at 6:51 PM
Elder Law Attorney serving Hollister, CA
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Charles R. Perry
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This question is best directed to an attorney in Pennsylvania, or other state where the inheritance tax was paid. Good luck.
Answered on Sep 13th, 2012 at 6:50 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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Please consult your CPA or tax attorney.
Answered on Sep 13th, 2012 at 6:48 PM
I am not an expert on Pennsylvania law. You will need to consult an Penn lawyer to find out the answer for Penn law. I can say that, in general, your problem will be to show that the date of death value (that you used on the return) was too high. The fact that it sold for less later could mean that the market value simply went down with time. You will need proof that the fmv on the date of death was too high. Generally this is done with a professional appraisal. Since you should have had a professional appraisal to start with for the return, you should go back to that same person and ask if they made a mistake.
Answered on Sep 13th, 2012 at 6:48 PM
Probate Attorney serving Palatine, IL
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Law Offices of Robert H. Glorch
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You need to send this to a PA attorney, not IL.
Answered on Sep 13th, 2012 at 6:47 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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This is a question for a Pennsylvania lawyer.
Answered on Sep 13th, 2012 at 6:47 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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Unless PA law is far different from Michigan law, I do not think they will do this. In fact, they may force you to use the other value for "tax purposes." Michigan does this for Inventory purposes in probate. You can either use two times SEV or pay to have an appraisal done. The SEV can be WAY higher than actual value, especially in this economy. If the house sells for $100k less than the inventory value, you do not get anything back. Counties and states are really hurting for revenue, these days. They will aggressively reach for whatever they can.
Answered on Sep 13th, 2012 at 6:44 PM