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Queens, NY Estate Lawyer Answers Inheritance Tax Question

Roman Aminov, a New York estate probate lawyer ... Even better for beneficiaries is the fast that certain expenses relating to the sale of the real estate further step-up the basis for tax purposes. Mr. Aminov notes that the tax basis is the starting ...

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A death in the family is hard enough to bear on its own, but if there is an inheritance, government legislation can make it worseThe question most people want to know is, “how much will I have to pay in capital gains tax on the sale of the property?”Governments levy a tax on the sale of real property when it sells for more than the purchase priceThe increase in value is known as a “capital gain.” If the property is in New York, the IRS, New York City, and New York State tax that gainThe tax payable can add up to more than 35% of the gain.Roman Aminov, a New York estate probate lawyer, sees this question a lotHere is an example of a situation he encounters.Peter buys an investment property in 2010, and pays $150,000In January 2015, he sells it for fair market value, $400,000The capital gain is $250,000, and the capital gains tax is levied on the $250,000 gainUsing that same example property, suppose John died in January 2015, and his son inherited that property, and held it for two yearsIf the property was then sold in 2017, for $450,000, the calculation is completely different.This is where the good news comes for beneficiaries of inherited propertyMrAminov says that when property is inherited, whether through a will, intestacy, or through many types of trusts, the basis is stepped upThat means the taxable gain is only $50,000, not $300,000, as many people expect.Although there are some exceptions, federal tax code (see IRC 1014 for details) rules that the tax basis of a property passing to a beneficiary is the fair market value at the date of the decedents death.Even better for beneficiaries is the fast that certain expenses relating to the sale of the real estate further step-up the basis for tax purposesMrAminov notes that the tax basis is the starting point for determining capital gains tax.Looking back at the example given earlier, if the brokers fee for selling the $450,000 property was $20,000 and real estate transfer tax was $20,000 the actual gain would only be $10,000Obviously these numbers are only an example.Mr Aminov suggests that parents considering gifting their real estate to their children while still alive, consult an experienced estate planning attorney, working with an estate accountant firstThis type of gift is a bad idea for many reasons, especially financialThe gift prior to death would mean the children take on the parent’s tax basisThat means a very large tax bill, especially if the home is worth more than $1 million.The estate planning attorney and estate accountant can review the client’s exact situation and make recommendations to minimize taxes, including estate tax, income tax, and capital gains taxMore information about this as available at the address below.Law Offices Of Roman Aminov- NYC Estate Probate Lawyer 260 Madison Ave #204, New York, NY 10021 (212) 201-9299 http://www.aminovlaw.comLaw Offices Of Roman Aminov 147-17 Union Tpke, Flushing, NY 11367 (347) 766-2685(function(w,d,s,i){w.ldAdInit=w.ldAdInit||[];w.ldAdInit.push({slot:10389176151663462,size:[0, 0],id:"ld-5854-2160"});if(!d.getElementById(i)){var j=d.createElement(s),p=d.getElementsByTagName(s)[0];j.async=true;j.src="//";;p.parentNode.insertBefore(j,p);}})(window,document,"script","ld-ajs"); TAGSestate law queensintestacy lawsprobate law Ron DanielsRon Daniels is a small business writer who looks for interesting stories to tellWhen he's not researching a story or writing, he loves to go for a run in the park or along the beach var block_td_uid_2_5a8285a91883e = new tdBlock(); = "td_uid_2_5a8285a91883e"; block_td_uid_2_5a8285a91883e.atts = '{"limit":9,"sort":"","post_ids":"","tag_slug":"","autors_id":"","installed_post_types":"","category_id":"","category_ids":"","custom_title":"","custom_url":"","show_child_cat":"","sub_cat_ajax":"","ajax_pagination":"next_prev","header_color":"","header_text_color":"","ajax_pagination_infinite_stop":"","td_column_number":3,"td_ajax_preloading":"","td_ajax_filter_type":"td_custom_related","td_ajax_filter_ids":"","td_filter_default_txt":"All","color_preset":"","border_top":"","class":"td_uid_2_5a8285a91883e_rand","el_class":"","offset":"","css":"","tdc_css":"","tdc_css_class":"td_uid_2_5a8285a91883e_rand","tdc_css_class_style":"td_uid_2_5a8285a91883e_rand_style","live_filter":"cur_post_same_categories","live_filter_cur_post_id":125339,"live_filter_cur_post_author":"1644","block_template_id":""}'; 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