Do I have to pay estate or inheritance tax?
I'm confused as to the difference. I've heard there is no tax on assets passed on that are less then 2 million dollars. Is that true? My brother and sisters and I inherited property in 2006 and sold it in 2007. We devided up the money and my share was $50,000. Do I have to pay federal tax on it? I'd also like to know about New York state tax too.
Public Comments
- you're supposed to pay tax on any "gain" you made by the sale, the difference from when you inherited the property then sold it.. however, you can usually get around that by doing depreciation, improvements, all write offs don't know about NY
- You do not pay federal "inheritance tax." The estate would pay any owed prior to distributing the assets. Can't tell you about any possible NYS tax. Your cost basis in the inheritance is the value of the assets you inherited at the time of the owner's death. If you sold the property for more than that, you may owe capital gains tax on the difference.
- For federal tax purposes you only pay tax on the gain which is the difference between the sales price and the fair market value on the date of passing of the person from whom you inherited the property. There could be a number of adjustments to the basis that would effect the gain such as the cost of sale.
- You'l owe tax on any appreciation the property had between the time the person died and the time you actually sold it.
