QUESTION
What will my tax obligation be on an inherited home?
Asked on May 16th, 2011 on Estate Planning - Florida
More details to this question:
My 80-year-old mother wants to put my name on the deed to her house, which has been paid off for quite some time. The value of the house is between $150K and $200K. Before proceeding with this, what will be my tax obligation when she passes?
3 ANSWERS
Theodore W. Robinson
There should be gift tax paid by your mother and that should be it. But you should speak to a tax accountant about it too. However, there are ways around the taxes by using estate planning procedures which an estate lawyer will know about and advise you. Good luck.
Answered on May 20th, 2011 at 8:47 AM
1 Award
In general, you do not want to be gifted a home that has gone up in value since your parents bought it. If they do give it to you and you sell it at a later date, you will pay capital gains tax on the difference between what you sell it for and what your parents paid for it. If you inherit the property through a will (subject to probate) or better yet a living trust (no probate), your basis (what the IRS considered you paid for the property) in the property will be whatever the property is worth when you Mom passes and thus if you sell it, you will owe little if any capital gain tax (unless the property goes up in value after your Mom passes).
Answered on May 19th, 2011 at 9:49 AM
Trusts and Estates Attorney serving Jacksonville, FL
Partner at
Law Office of David M. Goldman PLLC
3 Awards
It depends on where you live and what the tax laws are at the time she dies. In addition, it can make a difference how she adds your name. Often the best way (but not always) is to use an enhanced life estate deed so you get a stepped up basis. You should discuss the specifics with an attorney and CPA who can advise you on your specific circumstances.
Answered on May 19th, 2011 at 9:01 AM