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i was gifted real estate not part of an estate, but no gift was filed. she was not over life time limit before she died what will happen when i file the capital gains after sale
Optional Information: State/Country relating to question: Georgia Already Tried: nick
Welcome! Thank you for your question.Nothing will happen. It is the obligation of the person giving you the gift to file a gift tax return. Additionally, since you received the property as a gift, not as inheritance, you received the basis of the person that gave you the property. This means that your tax basis is equal to the amount that the person paid for the property plus any improvements you can prove. You will have to pay 15% capital gain tax on the difference between the tax basis and what you sell the property.If you are living on the property at least 2 of the last 5 years you will not have to pay capital gain tax.
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i should have been more clear (what happens) will irs asign a penalty or fine
No. The failure to report is not something owed by you. In fact they are two separate divisions and it is likely that there is nothing said. You will just report your basis as discussed above. No penalty or fine.
Experience: Over 14 years experience in Medicaid, Estates, Trust.