Father deceased & owes income taxe & has a loan with home as collateral. sister and I are beneficiary will we lose home.

Asked over 1 year ago - Houston, TX

owes taxes for 2011 and 2012. loan was aquired in 2012. In the will I am to buy my sister out.

Attorney answers (2)

  1. Arthur Harold Geffen


    Contributor Level 17


    Lawyers agree

    Answered . There are specific rules in Texas as to whether a house retains its exempt status when passing to children. IT does not sound like you and your sister meet that criteria. If, however, the home passes to you under your father's will and you refinance and take your sister out, before the IRS files a lien as to the taxes your father owes, then it is likely that the IRS will not be able to take the house from you. This depends on a great many things and I would urge you to contact a local Probate lawyer to help you.

    Hope this helps. If you think this post was helpful, please check the answer was a good answer tab below. Thanks.... more
  2. Christopher Dewitt Brockett

    Contributor Level 10


    Lawyers agree

    Answered . As Texas does not have income tax, we will assume the taxes owed are for Federal income Taxes. The 2011 return was due on or before April 15, 2012 (unless an extension was obtained to file the tax return Form 1040). Therefore, depending on when in 2012 the loan on the property was acquired the loan will probably have priority over any tax lien. You and your sister have the abilty to pay off the loan, but if you chose to not pay to loan, then the property will be subject to foreclosure and forfeiture.

    You will need to open a probate for your father's estate (you will need the assistance of a licensed attorney to handle the probate process) and the income taxes and the loan will both be liablities of the Estate. These will both lower the value/equity of the property and you will then owe your sister the 1/2 of the equity of the property. Hope this fully answers your questions.

    Disclaimer: This answer is designed for general information only. The information presented on above should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

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