stepfather passed away.. house sold by executor, proceeds split among 4 children... is there nj tax on this... We did get tax waivers,,, a bit confused.
Estate Planning Attorney
Hello. It's okay to be confused, this stuff can be confusing. The tax waivers you mention are probably the inheritance/estate tax waivers, which answers one question. That means the estate was probably handled properly. Inheritance tax is a separate issue from income tax possibly due from you as beneficiary. I take it that your $25,000 represents your 1/4 equal share of the estate proceeds from the house. Therefore you may have a personal capital gain issue for your own 1040. The amount of the capital gain is the difference between the sales price and the date of death value (as probably stated on the inheritance tax return which hopefully had an appraisal). This amount is in turn divided out based on the number/% each recipient received. The other issue would be what year the income is taxable in. I would obtain a copy of the inheritance tax return, tax waiver, appraisal and accounting (if there is one), and approach a qualified CPA to help you prepare your income tax return and determine if you do or do not have a capital gain to report. This is not all that difficult for qualified professionals but you should make sure you do it right. Just so you understand, the fact that this is inherited property means that you likely received stepped up basis and therefore a smaller capital gain - which is a good thing.
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/
Real Estate Attorney
I agree with Mr. Zeniger, it appears from the facts listed that the estate was properly probated. As a stepchild in NJ you will not owe an inheritance tax and most likely not be capital gains tax either. You should consult a CPA to help file your taxes.
This answer is based on general legal principles only and is not intended to provide specific legal advice. This answer is for informational purposes only and does not constitute the formation of a lawyer-client relationship. Any reader of this answer should not make decisions based upon in without first directly consulting with an attorney.
Elder Law Attorney
There are so many tax issues related to inherited property that it can be confusing. The tax waivers you mentioned pertain only to the NJ inheritance and estate tax... The waiver confirms that either there was no tax due or if tax was due it was paid. Capital gains tax on the sale proceeds is related to income tax, which is separate from the inheritance and estate tax. Sounds like the estate is in good shape having received the waivers.