inherited property

[amcoffee]

What is the name of your state (only U.S. law)? Live in AZ, inherited property in NY. What are the capital gains laws and what can I do to limit what I have to pay in capital gains taxes. I already have a hefty sum of money due for inheritance tax.

[FlyingRon]

Inherited property steps up in basis to that on the day of the deceased passing. You only owe a gain on the difference in what you sell it for and the value at that time.

I'm curious to what hefty sum of inheritance tax you are talking about? Neither NY or Arizona have one, neither does the Feds (the feds have an estate tax, but that has a pretty hefty exclusion on it).

[HomeGuru]

Originally Posted by amcoffee

What is the name of your state (only U.S. law)? Live in AZ, inherited property in NY. What are the capital gains laws and what can I do to limit what I have to pay in capital gains taxes. I already have a hefty sum of money due for inheritance tax.

**A: post in the Tax Law forum.

[amcoffee]

I understand the step up basis however I am wondering if here is anyway to reduce the capital gains and just what is the capital gains tax? What is the difference between short time and long term capital gains? There will be a difference between the value at the time of passing and when the property is sold.


NY state (where the property is located if the value is over 1M you pay estate tax and this is the hefty hit I was talking about. I am trying to keep the tax amt down.

[FlyingRon]

Reduce what capital gain? When did you inherit the property? Are you saying you have substantial capital gain on this in today's economy? The gain is the difference between the selling price (less any costs of the sale) and the basis (the value on the date of death). You can't do anything to "reduce" that gain. It is what it is. A long term gain is one held for more than a year. That includes the time the deceased held it as well. A long term gain (at least for now) gets lower tax rate.

Is this property worth over a million?

Now what are you talking about AMT in the same breath with estate taxes? The estate tax is due from the estate, not from you. You may be subject to AMT, but what that means exactly depends on what other deductions you have this year.

You seemed to be confused enough that I suggest a CPA or other tax professional.

[anteater]

Now what are you talking about AMT in the same breath with estate taxes?

I think that the OP was abbreviating "amount."

A long term gain is one held for more than a year. That includes the time the deceased held it as well.

A clarification: The holding period for inherited assets is always considered to be long-term. You may be thinking of gifted assets.