Capital Gains and Losses
Capital Gains Tax Questions? Ask a Tax Advisor for Answers ASAP
Hi, my name is Mark. I will be happy to help you with your questions.
You mentioned that this property is not your Mother's primary residence. Was it her primary residence in the past 5 years?
Is this a rental property?
Ok, you would need to know what your Mother's cost basis in the property it. This would be the purchase price plus the cost of improvements.
The difference between the purchase price and the cost basis would be a capital gain.
Do you know approximately what the gain would be from the sale of this property?
Did she inherit this property?
Does you mother have any other sources of income?
Ok, how did your Mother acquire the property?
Did she inherit the property from her sister? Or was the property a gift before she passed away?
If it was a gift, she would assume the same basis that her sister had in the property. This would reduce the gain a little.
I am going to assume that the $400,000 is accurate for the capital gain for now and do a quick projection.
Yes, she will be. At a gain of $400,000 here taxes would be around $66,000 for the federal. I am checking on the MD tax right now.
The capital gain at the federal level will be taxed at 15%.
The state will be about $22,000. MD has a progressive rate. Anything above $250,000 will be taxed at 5.75%
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If you can find out what the sister's basis in the property that would help reduce the capital gain.
It was my pleasure. Please let me know if you need anything else.