Posted by phil fernandez on February 23, 2002 at 19:26:58:
Great position to be in. First off inheriting the house, the beneficiary of the estate, the heir will acquire the property at the current market value. His basis will be established with this current market value upon the death of the owner. So even if the heir sold for all cash, there shouldn’t be any capital gain. The heir might as well sell for cash as there won’t be a gains tax involved.
He probably could sell the house for a bit more if he offered owner financing. Also not a bad position to be in.
Need a little help. client inherited house free and clear. Does not want house or need cash. Wants to avoid big tax bill. He is open to any ideas i can bring to the table. Please help- PatP
Re: please help avoid big tax on inherited house - Posted by Nate(DC)
Posted by Nate(DC) on February 23, 2002 at 23:54:55:
Phil is correct; the basis in the house is stepped-up to its market value as of the date of death. There should be no tax due unless the property has appreciated dramatically since the former owner died.