Do I Pay Capital Gains Taxes On Inheritance?
Oh somebody please help! My aunt sold my deceased grandfathers property and split the money between herself and a few other family members. Now that we have all spent the moeny, she is saying we have to "chip" in to pay CGT!! Ugh, what now? We live in the bay area, and sold for 650k, and my grandfather bought the house over 50 years ago. I thought I read that when you inherit an estate it is inherited at FMV, and therefore if you sell quiclkly, which we did, then capital gains taxes should be minimal. .WHat can we do now? :-o
It is difficult to say with our more details. Your aunt needs to consult with a tax attorney or CPA to make sure that everything was done property. However, your general comments are correct. You would receive a step up in basis equal to the fair market value at the date of death and if you sell quickly their would probably be little if any capital gain taxes. However, that does not mean there were no estate taxes. There may be estate taxes and no liquid funds left in the estate to cover the taxes. The only sure bet here is some good tax and estate advise.