QUESTION
What is our tax liability for sale of deeded estate?
Asked on Jan 30th, 2013 on Estate Planning - Michigan
More details to this question:
Our mother's estate (land, house, structures) was deeded to four heirs. We are in the process of selling the estate.
16 ANSWERS
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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You will report your gain or loss as a capital gain or loss. Your information does not provide enough info to determine basis.
Answered on Feb 05th, 2013 at 12:38 PM
Business Law Attorney serving Livonia, MI
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Gerald A. Bagazinski
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Your only income tax liability will be the difference between the fair market value and the actual net sales price. You get a stepped up basis to fair market value as of the date of death.
Answered on Feb 05th, 2013 at 12:37 PM
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This is a complex issue that should be addressed only after more information is obtained. While I certainly understand why you posted the question on a website, the best advice I can give you is to speak to an attorney who regularly practices in this area. It may be that you will have no tax liability; but it may be that you will have some, so please contact an attorney.
Answered on Feb 05th, 2013 at 12:37 PM
Generally, the property of the estate receives a step-up in basis to the date of death value of the property. This is usually determined by an appraisal. You should consult with an attorney specializing in estate matters and an accountant specializing in income tax filings for probate estates for further assistance.
Answered on Feb 05th, 2013 at 12:36 PM
Real Property Attorney serving Utica, MI
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Douglas A. Tull, P.C. Attorney at Law
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Need more facts to advise. If you are a Michigan resident and the property is in Michigan, then there is no inheritance tax. If the estate size is less than $5 Million (which I assume it is or you wouldn't be asking a question on Law Q&A) there won't be an estate tax, and the real estate would receive a step up in basis to the value at date of death so that most likely if you sold the property right now (shortly after death), there would be no capital gains tax, either.
Answered on Feb 05th, 2013 at 12:36 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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You need to talk with an accountant and go through the details. First, there is Federal estate tax if the estate is greater than $5,000,000. There is no estate tax in Idaho. So, if the estate value is less than $5,000,000 you should be okay. But still, talk with an accountant to make sure.
Answered on Feb 05th, 2013 at 12:35 PM
The tax depends on the value of the whole estate.
Answered on Feb 05th, 2013 at 12:35 PM
Trusts and Estates Attorney serving Troy, MI
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Barron, Rosenberg, Mayoras & Mayoras, P.C.
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Since you received the property through a lifetime gift (unless your mother retained a life estate) you will pay capital gains over the adjusted cost basis (costs plus improvements) of the property.
Answered on Feb 04th, 2013 at 9:01 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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Did your mother transfer the property to you during her lifetime? If yes, then you need to know how much she paid for the property, and how much she invested in improvements. That will give you your "basis" in the property. The capital gain is amount realized minus the basis. If you inherited the property from your mother upon her death, then your basis in the property is its fair market value on the date of her death if sold in a reasonably short time after her death, probably no capital gain at all.
Answered on Feb 04th, 2013 at 9:00 PM
Bankruptcy Attorney serving Alpena, MI
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Carl C. Silver Attorney at Law
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Their should be no tax if under four million dollars.
Answered on Feb 04th, 2013 at 9:00 PM
Estate Planning Attorney serving Marquette, MI
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The Wideman Law Center, P.C.
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You may have capital gains tax on the sale of the real property.
Answered on Feb 04th, 2013 at 8:59 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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You need to consult a tax accountant for that kind of expertise.
Answered on Feb 04th, 2013 at 8:58 PM
There should be no estate taxes unless the estate is over $5,250,000.
Answered on Feb 04th, 2013 at 8:55 PM
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The estate should pay the tax on the sale. There may be capital gains if the asset appreciated since her death. If the asset was depreciated there may be additional taxes. You should speak with a CPA to assist you with the tax issues.
Answered on Feb 04th, 2013 at 8:54 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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It depends in other assets in estate and expenses in estate.
Answered on Feb 04th, 2013 at 8:53 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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If the estate consists only of real estate, there would generally BE NO tax liability, because you get a "step-up" in basis to the FMV, at the time of death. The only time there would be gain is if you held onto the property for several years after death, in which case, the gain would be from the time of death, forward.
Answered on Feb 04th, 2013 at 8:48 PM