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Do You Need to Pay Capital Gains Tax on Inherited commercial…

Do You Need to...

Do You Need to Pay Capital Gains Tax on Inherited commercial Arizona Property If Sold?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

My mother passed away and left her commercial investment property to myself and my brother. The property is in Arizona where I live, my brother lives in California. What will be Capital Gains Tax on Inherited Property If Sold? She traded up on her original property in 2012 to this current property (1031 exchange) original cost 1.1 million, now worth 1.3 million. Thank you

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Not sure it matters? The original property was in California purchased over 20 years ago. She sold it in 2012 and traded up, purchased the Arizona property under 1031 exchange.

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Answered in 5 minutes by:
2/14/2018
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,178
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Good news for you and your brother!

Once the property is inherited, they can immediately sell without paying any capital gains

Heirs (you and your brother) receive a stepped up basis (which means at the fair market value at the time of death). A stepped up basis basically erases whatever capital gains tax may be due to the IRS, and you and your brother will not have to pay any tax on the gain that was deferred.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,178
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
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