QUESTION
Do we pay taxes on the amount we inherit due to this sale?
Asked on Sep 18th, 2014 on Estate Planning - Michigan
More details to this question:
My sister and I inherited our parent’s house which we are selling.
3 ANSWERS
Business Law Attorney serving Bingham Farms, MI
at
James T. Weiner, P.C.
Update Your Profile
If you inherited the house and it went through probate .. you took it at a stepped up basis.. so you only pay taxes on the amount that is in excess of the value when you received it in probate.. (e.g. the increase in value after death) However if your interest was gifted to you before death (say by your parent retitling it to you and your sister as joint tenants with a right of survivorship) you pay taxes on the increase in value from the date your parents purchased it .. you do not get the stepped up basis for tax purposes.
Answered on Sep 19th, 2014 at 1:35 PM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
Update Your Profile
I would have to know more to provide an opinion. To accomplish this you will probably need an attorney sooner or later. Be efficient, engage one now.
Answered on Sep 18th, 2014 at 11:20 AM
Generally, no. If, however, the house has increased in value since the last of your parents died, then you might, depending on the sale price.
Answered on Sep 18th, 2014 at 11:19 AM