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Sandi Hargrove, SkyHawks
Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience:  I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
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Tax

Customer Question

Mother died 6/87 left house/land to son & daughter equally. Son got mortage to pay off daughter 50% share 3/2005. What does daugther pay in Federal/ State income tax and on what basis? Appraisal was $440,000.daughters share was $240,000. Value Date of death of mother was???
Submitted: 11 years ago.
Category: Tax
Expert:  Jon Andrews replied 11 years ago.

To provide you with a complete and accurate answer to your question, the "value date of death of mother" question has to be answered.


Generally speaking, the $240,000 (net of any out of pocket expenses that the daughter paid) minus the "value date of death of mother" will be a long term capital gain.


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Expert:  Sandi Hargrove, SkyHawks replied 11 years ago.

The value of the house/land on the date of death must be established first. This can possibly be obtained from the real estate tax office in that county or may have been established when the deed was transferred into son/daughter names when they inherited the property.


The daughter will have as her adjusted basis in the home the total of 50% of the fair market value amount listed above plus any capital improvements to the house/land after inheriting that she paid for(50% if jointly paid by brother) plus the expenses of the sale minus any casualty loss claimed on her return for the house/land while she owned it minus any depreciation allowed/allowable for business use of the house while she owned it. This will be her adjusted basis.


Sale price to the son minus the adjusted basis will be her long term capital gain/loss to report on her own Schedule D.


Sandi Hargrove, SkyHawks, Master Tax Advisor, Enrolled Agent
Category: Tax
Satisfied Customers: 1257
Experience: I am a Master Tax Advisor and Enrolled Agent. I have 40 years experience. Trucking specialist.
Sandi Hargrove, SkyHawks and 2 other Tax Specialists are ready to help you
Customer: replied 11 years ago.
Jon Andrews, Sandi Hargrove, Thank you for yuour swift replies.. New Jersey Transfer Inheritance Tax Bureau form shows $244,500. as the Market Value at Death..Computions, Appraised value 3/2005 $480000.less value d/d $244500.=$235500. 50% equals 117,750 taxable amount to daughter..Would the be correct??? Thank [email protected]
Expert:  Jon Andrews replied 11 years ago.

That is correct. Taxable at a maximum rate of 15%.


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