Stepped up for Capital Gain, but Inheritance Tax? - Posted by Sara_CA

Posted by Natalie-VA on May 08, 2006 at 14:08:06:


Definitely verify what I am telling you since I am not a CPA. It’s my understanding that if she passes away, you will only receive a stepped up basis on her half of the property. I’m not sure if placing title in the living trust changes this or not.


Stepped up for Capital Gain, but Inheritance Tax? - Posted by Sara_CA

Posted by Sara_CA on May 08, 2006 at 24:42:08:

I bought a property with my mother?s funds as down payment. Title is vested such that my mother and I own jointly with rights of survivorship. She intended for the title to go to me upon her passing because I am a single parent. She is in her 80?s.

We are putting the property into a living trust. I am the trustee. She is the primary beneficiary 100%. I am the contingent beneficiary 100%. If both of us die, my under aged son is the then sole beneficiary. My two bothers, and sister are okay with this trust.

The main reason for this trust is to get the stepped-up basis for the calculation of the Capital Gain tax when she passes, at which time I will own 100%. But is there Inheritance Tax at the time of her passing?? Are there any other taxes I need to worry about?

There is another big concern. In the unlikely event that I pass before my elderly mother, she will get 100% as the primary beneficiary. If she subsequently dies, will my two brothers, and sister inherit this property? How should I word the trust so that this does not happen?

Thanks in advance for your thoughts. Thanks to this great forum.