Thank you for your patience.
So when a person inherits a property, the heir receives a stepped up tax basis for federal purposes. What this means is that any appreciation during the original owner's lifetime is essentially wiped clean, and the heir is only responsible for taxes on appreciation between the date of death, and the date of sale. This is a very useful tax tool.
This is the IRS's explanation:
An individual, including an heir, may gift up to $14,000 per year without having to file any tax documents. Please see:
They may also gift amounts up to $5,134,000 over a lifetime, without incurring a gift tax, but for amounts over $14,000 the gift form must be completed. please see:
It is also possible to "disclaim" an inheritance-this is a manner in which an heir can allow property to pass through, to go to the next on the list, so to speak. This is most common when a wealthy parent wishes the property to pass directly to their children, so that the property never enters the parent's estate. All or a portion of an inheritance may be disclaimed.
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