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Posted by D. Stussy on April 24, 2008, 12:53 am
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> My sister passed away in August 2007. We hired a lawyer to settle her
> estate. The state is NY. She had 2 assets that were of any real value
> 1. A brokerage account (around $ 200,000), and a house she bought in
> 2001.
> The brokerage account was a TOD (transfer on death) the benefieciaries
> were 50 % me, 50 % my father (she wasn't married). She did not have a
> will. The lawyer asked us to open up an estate acccount (we did). We
> sold the home in February of 2008 for 215,000. The house was estimated
> at 215,000 - 225,000 around Ocober of 2007 when we had some real
> estate agents come look at it. The proceeds of the house less the
> mortage went into the estate account. My question is...how much tax do
> we on the sale of the house? Don't we use the "step up value method"
> My understanding from th IRS website is was we use the FMV of the
> house at the time of death. the IRS publications are confusing to say
> the least....then I read somewhere that I use the value my sister paid
> for the house back in 2001+ improvements to arrive at FMV.. so what
> I'm asking is what value do I use for the purpose of the fiduciary
> return and tax purposes? of course FMV at time of death would amount
> to a fraction of the tax as opposed to paying tax on the price she
> paid + improvements. Thanks in advance.
Federal income tax: 0
Federal estate tax: 0 (most likely; depends on lifetime gifts)
The actual sale of the asset within 6 months is generally considered its
fair market value, alternative valuation or not.
If there are any state level inheritance taxes, I have not addressed those.
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