Answer

Hello ds,

When you inherit property, you receive a stepped up basis, meaning your new basis is the fair market value of the property on the day you inherit it. When you then sell the property, you would be liable for tax on any gain you had from the sale. Your gain would be figured by taking your selling price less your new basis less any selling expenses. If you sell a property shortly after inheriting it, then in most cases you have little or no gain, as your selling price is likely to be the same as your new stepped up basis.

This same stepped up basis would apply to stocks you receive. Your new basis would be the market value of that stock on the day your mother in law passed away. If you now sell the stock for more than that amount, you have a long term capital gain with a maximum tax of 15%. If you sell the stock for less than your new basis, you have a deductible loss. Capital losses on the sale of stocks are limited to no more than $3,000 in any one year, but excess losses can be carried forward and deducted in future tax years.

If you did have any gain at all, it would be taxed as a long term capital gain, and that tax rate is currently capped at 15%. You would also owe regular tax on any gain to the state of Ohio on the sale of the home.

If you do have a gain you will report the gain on Schedule D of your federal tax return. If you have a gain from the sale of the home, you will file a non resident return with the state of Ohio and pay tax on any gain you had from the sale of the home.

As far as inheritance taxes in Ohio, there are no inheritance taxes but there are estate taxes on estates which exceed a certain value. OH has an estate tax which applies to estates with a total value of $338,333 or more. If your mother in law's entire estate was below this value, no OH estate taxes are due.

Any taxes that you owe are not due until the end of the year when you file your tax returns. But if you know that you will owe taxes at the end of the year and if you think the amount you owe will be substantial, then you should consider making an estimated payment now so you can avoid also being assessed a penalty or interest due to underpayment of taxes.

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Thank you ds and let me know if you have more questions. I am happy to help you with whatever I can.