Currently, inheritance of a certain amount or value is subject to an inheritance tax. However, these regulations are changing. Look here for more information about when inheritance tax applies and any changes in the law.
Home Inheritance Requires Home Repair
When doing estate planning you may want to consider who will get your real estate and whether those heirs can afford to maintain the real estate. If multiple family members inherit a home together how can they ensure that home repairs get made and that everyone pays their fair share? This is also an issue for property taxes when there's a home inheritance.
Protect Home With Estate Planning
Estate planning is crucial to ensuring your family's safety upon the death of a family member. When you live in a home but your name is not on the home's title you risk losing that home if the people who are on the title decide to ask you to move out. When property is co-owned with family members, it's important to structure property ownership in a way that protects you in case they pass away.
Estate Planning Helps With Real Estate Decisions
When your family owns several real estate investments, it's important to do thorough estate planning so that the wishes of those who own the properties are met. How can you balance a property that needs repairs with ensuring an elderly relative's medical costs are still met? An estate planner can help decipher the tax laws and help make good decisions for the property owner and the children who stand to inherit the home.
Taxes On The Sale Of An Inherited House
The holding period for inherited property is considered long-term, no matter when it is sold after death. The favorable long-term capital gains rate (currently capping out at 15 percent) would apply versus the ordinary income tax rates that would apply if it was treated as a short-term capital gain.
Capital Gains Tax Depends On Market Value
When you sell property that's an inheritance how much capital gains tax do you owe? It depends on the market value of the home when you inherited it and how long you own the home after the inheritance occurs. A typical capital gains tax rate is 15 percent. You may also want to consult with a real estate attorney to determine the cost basis and capital gains tax.
Selling Half A Home
If a home is in two owner's names, either one could sell their half of the home to anyone. But it is unlikely that anyone would want to buy a half of a home. Either owner of the home can bid to purchase the home from the other or the some can be sold to the highest bidder with the proceeds from the sale being split between the owners of the home.
Real Estate Deals Need To Protect Family Members
Sometimes the relationship between parent and child is not enough to save a real estate transaction. Even between family members, you need to have a signed ownership agreement that documents the ownership arrangement. Threatening to withhold inheritance from the child may help this mother get back the proceeds from a mobile home sale.
Using Transfers To Avoid Taxes May Be Unlawful
The home buyer wants to purchase a home his father and uncle inherited but avoid as many taxes and a reassessment of the property if possible. He wonders if a transfer of the property is the right move to avoid taxes. Transfers maybe unlawful and a local attorney who knows about intra-family transfers should be able to help with this property transaction.
No Need For Quit Claim Deed To Pass Inheritance
Is a quit claim deed is the right answer for ensuring that beneficiaries avoid probate and that a home will ultimately go to your children? Quit-claim deeds often cause considerable problems for both the homeowner and the homeowners-to-be. A trust might be better for ensuring that inheritance avoids probate. Consult an estate planning attorney to learn about inheritance options.
Paying Taxes On Inheritance
When it comes to stocks, inheritance and other assets that have appreciated over time, you inherit these assets at the value they had at the time of inheritance or acquisition. Unless one of these accounts was of a type that had designated you as a beneficiary and are taxable to you directly, you should not have to pay any tax on the amounts you received.