How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask RayAnswers Your Own Question
RayAnswers
RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 39413
Experience:  Texas lawyer for 30 years in Estate law
8534270
Type Your Estate Law Question Here...
RayAnswers is online now
A new question is answered every 9 seconds

My mom is 84. My father past away five years ago. Last year

Customer Question

My mom is 84. My father past away five years ago. Last year she sold a property in California and gifted the $50,000 she gained in the sale of the home. The money was gifted to three of my siblings. She also recently sold her home in California for $87,000. She is using the money for her living expenses. She is also planning on selling a small ranch in El Paso TX for about $30,000. If she is using this money for her living expenses, does she have to report any of this to the IRS. She currently gets $1300 per month for social security. She currently lives in El Paso Texas. She lives with my sister and at times at her ranch outside of El Paso.
Submitted: 1 year ago.
Category: Estate Law
Expert:  RayAnswers replied 1 year ago.

Hi and welcome to JA. I am Ray and will be the expert helping you today.

Yes she may owe capital gains on the value from the time father deceased until time she sells it.There is no inheritance tax but she held the property here for a period of time.If there is a gain here for those five years she may owe capital gains taxes and they need to be reported the year of sale.This is the basis of the sale(date father deceased).Each year there was a sale she likely owed capital gains.There is an exclusion available if she lives in it 2 out the last 5 years.

Reference

http://finance.zacks.com/need-pay-capital-gains-tax-inherited-property-sold-1749.html

Exclusions.

http://www.nolo.com/legal-encyclopedia/avoid-capital-gains-tax-selling-home-29901.html

She will need to amend her returns for any years she had capital gains and did not report them.She needs to do this before they audit her.She likely owes taxes on at least one of these properties depending on where she was living.

I appreciate the chance to help you tonight.Please let me know if you have more follow up.Thanks again.

Expert:  RayAnswers replied 1 year ago.
I wanted to add that if she lost money here, the property in the time she inherited it until she sold it then she gets a refunds thats called a capital loss.
You may want to have her speak to a tax preparer to see either what she owes or what she is due as a refund.
Thanks again.
The tax preparer looks at taxable value on date of father's death and what it sold for.Looking up the tax value for that year is a good first step the tax preparer will need this.
Thanks again.
Expert:  RayAnswers replied 1 year ago.
If you can leave a positive rating it is always much appreciated.Let me know if you have more here.Thanks again.
Expert:  RayAnswers replied 1 year ago.
Let me know if you have more here, it is never a problem.I appreciate the chance to be of service.

Related Estate Law Questions