Capital Gains Tax Not Owed On Inherited Property
REM #F701
By Ilyce R. Glink
Summary: A reader has inherited a piece of property that she is now in the process of selling. She is wondering about the capital gains tax. Ilyce explains that the deceased is entitled to pass down $2 million in her estate tax-free.
Q: My mother in law died in March. We are in the process of selling her house.
She bought it 10 years ago for about $75,000.
We believe the property is now worth about $125,000. Will we have to pay capital gains taxes on it? If so, how much will we owe?
A: My condolences on the loss of your mother-in-law.
Your mother-in-law is entitled to pass down $2 million in her estate tax-free
this year. When you inherited her property, you inherited it at its current
market value, approximately $125,000.
That amount is counted toward her estate. As long as the estate is valued at
$2 million or less, you can sell the property and keep the proceeds tax-free.
For more details, please consult with your estate attorney.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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