Assuming that the Decedent still had $300,000 of their exemption from estate tax available, then you would have no estate tax due on the inheritance. If the date of death value of the property is $300,000 and you sell your 1/4 interst for $75,000, you would not incur any tax. If you sell your share for $80,000, then you would pay tax on the $5,000 of gain. I hope that helps. Please remeber to select the best answer.
This response is not intended to create an attorney client relationship. The response is solely intended to answer the question presented. Additional facts and issues are unknown to the responding attorney. Should you still have questions, legal assistance should be sought by making an appointment to meet with an attorney, rather than attempting to resolve the issue via e mail. This response is merely provided to give direction to assist you in the decision of whether you should contact an attorney or not.
Have you sold the property?
Louis T. Wierenga Assisting in mitigating your business and tax risks. www.LTWLAW.com E Ltw@LtwLaw.com Twitter @LTWLAW The information provided is for general purposes only and should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.
First, inheritance is not subject to income taxes. Second, California does not have an inheritance tax. As pointed out, the exemption from Federal estate taxes was $5M in 2010 and 2011, 5.120M in 2012 and 5.25M in 2013.
That said, what is really important is that you document the date of death value and make sure you can prove it such as by an appraisal. The date of death value will be your basis for determining taxable gain if the property is later sold.
The general advice above does not constitute an attorney-client relationship: you haven't hired me or my firm or given me confidential information by posting on this public forum, and my answer on this public forum does not constitute attorney-client advice. IRS Circular 230 Disclosure: In order to comply with requirements imposed by the Internal Revenue Service, we inform you that any U.S. tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.