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Utilit99

Anyone ever inherit a house?

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I did about a month or so ago. It's now sold at this point and is under contract and is expected to close in the next couple weeks. Seems it will go through as the buyer sold their place and they have a strong background as far as wealth and are very settled and committed. No contingencies. 

For taxes, I read that if you inherit a house, that you don't pay taxes on it for the increased value from when it was bought by the owner who I inherited from, in this case my dad, but rather if I were to hold onto it and the home increases in value from the person who died death date, I only pay gains from that date. 

Does that sound right? I am pretty sure it is but is there any further complication to that?

I read this on a real estate page:

The bottom line is that if you inherit property and later sell it, you pay capital gains tax based only on the value of the property as of the date of death.

 

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Somebody left me season 4 on dvd. Hope the Lorrie is ok is okay I guess.

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Just now, wiffleball said:

Somebody left me season 4 on dvd. Hope the Lorrie is ok is okay I guess.

What were your tax implications? 

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Fock if I know. Seems like maybe the estate would have some separate liability for it too but I could be wrong. You’d have to consult a tax attorney to know for sure or maybe an accountant would do

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2 minutes ago, IGotWorms said:

Fock if I know. Seems like maybe the estate would have some separate liability for it too but I could be wrong. You’d have to consult a tax attorney to know for sure or maybe an accountant would do

Yeah, I will do that for sure. I got a bunch of feedback already but I'm out of state and not sure from state to state if it varies. I'll have an accountant  to deal with it cause there is no way in hell I trust myself with taxes. 

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i sleep with your mom every night but i wouldnt call it inheriting the house.

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17 minutes ago, JustinCharge said:

i sleep with your mom every night but i wouldnt call it inheriting the house.

So, you sleep in Queen of Heaven cemetery every night? Thanks dude. That's nice. 

Pretty sure you got nothing else going on anyway but it's a nice gesture.:thumbsup:

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You pay the gain from the time you inherit to the time you sell. Biden is trying to change that and tax you on the full gain. 

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1 hour ago, Dizkneelande said:

You pay the gain from the time you inherit to the time you sell. Biden is trying to change that and tax you on the full gain. 

This is what I recall as well.  However, I don't know how the value at the time it's inherited is determined.  I assume an appraisal...perhaps that has to be done as part of wrapping up the estate.

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8 hours ago, Utilit99 said:

I did about a month or so ago. It's now sold at this point and is under contract and is expected to close in the next couple weeks. Seems it will go through as the buyer sold their place and they have a strong background as far as wealth and are very settled and committed. No contingencies. 

For taxes, I read that if you inherit a house, that you don't pay taxes on it for the increased value from when it was bought by the owner who I inherited from, in this case my dad, but rather if I were to hold onto it and the home increases in value from the person who died death date, I only pay gains from that date. 

Does that sound right? I am pretty sure it is but is there any further complication to that?

I read this on a real estate page:

The bottom line is that if you inherit property and later sell it, you pay capital gains tax based only on the value of the property as of the date of death.

 

The house will be stepped up to fair market value.  When the estate distributes the house to you, assuming it was a specific bequeath,  it is distributed at that value.  Any gain generated between the time of death and the sale would be taxable to you, I believe as capital gains but I am not sure. 

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My mom stole the money I made from working at Mcdonald's to pay her mortgage.

Does that count?

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9 hours ago, Utilit99 said:

I did about a month or so ago. It's now sold at this point and is under contract and is expected to close in the next couple weeks. Seems it will go through as the buyer sold their place and they have a strong background as far as wealth and are very settled and committed. No contingencies. 

For taxes, I read that if you inherit a house, that you don't pay taxes on it for the increased value from when it was bought by the owner who I inherited from, in this case my dad, but rather if I were to hold onto it and the home increases in value from the person who died death date, I only pay gains from that date. 

Does that sound right? I am pretty sure it is but is there any further complication to that?

I read this on a real estate page:

The bottom line is that if you inherit property and later sell it, you pay capital gains tax based only on the value of the property as of the date of death.

 

Called a step up in cost basis.

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1 hour ago, Gladiators said:

This is what I recall as well.  However, I don't know how the value at the time it's inherited is determined.  I assume an appraisal...perhaps that has to be done as part of wrapping up the estate.

Yeah. We put small updates into the place like got rid of some wallpaper and painted it a neutral white, and a small amount of mold in the attic over the garage we got rid of as well as cleaning up the wood floors that were a bit dirty as compared to under the rug. So pretty simple and minor changes. Not sure if that is increasing the value and therefore would be considered capital gains. We put it on the market within weeks after inheriting it, then it sold almost immediately for higher than we expected actually. 

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51 minutes ago, Utilit99 said:

Yeah. We put small updates into the place like got rid of some wallpaper and painted it a neutral white, and a small amount of mold in the attic over the garage we got rid of as well as cleaning up the wood floors that were a bit dirty as compared to under the rug. So pretty simple and minor changes. Not sure if that is increasing the value and therefore would be considered capital gains. We put it on the market within weeks after inheriting it, then it sold almost immediately for higher than we expected actually. 

Ask the executor, they should have the stepped up bases.  I believe every state requires an estate to be probated if there is real-estate involved.

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1 minute ago, Bert said:

Ask the executor, they should have the stepped up bases.  I believe every state requires an estate to be probated if there is real-estate involved.

Yeah. My sister is the executor, and she is very thorough, but I never thought to ask about that. Thanks.

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Yes, about 3 years ago, sold at around market value, so didn't have any capital gains on it.  

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Just now, rurbaniak said:

Yes, about 3 years ago, sold at around market value, so didn't have any capital gains on it.  

:thumbsup:

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Everything said here has been :thumbsup:

Also I think you can deduct the expenses that you incurred in getting it ready for sale from the gain.  🤔

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