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Do I have to pay taxes on a estate/property inheritance?

The property was later sold, I was unaware of any taxes or tax penalties. Is there any allowance for it being a first-time inheritance? I can not afford to pay it so any help you can offer is appreciated.

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  Answers  |  2

March 15, 2018

If you are talking about Federal estate taxes, depends on the value of the estate. If the estate happened in 2017, the estate gets a $5.49 million exclusion or 100% if the beneficiary is the spouse. Not sure what you mean the property was later sold. That is an income tax question. Was it sold by the estate or the beneficiary? In either case, you get a step up in basis, meaning the basis is the value at the date of death. So the tax may be none if the sales price was less than the stepped-up basis, then there is no gain. It also depends on the type of gain, ordinary or capital like in an investment property or rental. Lots of unanswered questions.

$commenter.renderDisplayableName() | 04.24.18 @ 04:45

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March 15, 2018

When inherited property is sold, it triggers a taxable event or, at least, a reportable event. The tax is based on the profit between the selling price less any applicable expenses, and the cost basis as reported on the Inheritance Tax Return or, if none filed, the value as of the date of death of the decedent. If there is a loss, that loss may trigger some tax savings.

Different types of property have different applicable tax rates. While your question appears to be concerned with income taxes, it also could be questioning inheritance or estate taxes. For the most part, inheritance and estate taxes are only chargeable against the estate and not the individual beneficiaries. However, you need to consult with your own tax professional, as each state has different rules.

$commenter.renderDisplayableName() | 04.24.18 @ 04:45

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