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Calculating the Value of an Estate, Real Property

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joehart

Junior Member
What is the name of your state (only U.S. law)? Ohio

I have two quick questions for calculating real property in a Decedent's Estate to decide if an Ohio Estate Tax Form may be required. I am a beneficiary and the Decedent died prior to 2013, so an Estate valued greater than $338,000 requires an Estate Tax Form to be completed. No surviving spouse.

1. If a Decedent owned real property and half (1/2) of the property value was owned by the bank (mortgage loan). Would the total assessed value of the real property be counted or would just the equity of the home count in a Decedent's Estate?

2. If a Decedent (the mortgagee) had real property (separate from above) which is titled to an individual/company (the mortgagor). How would this add to the value of the Decedent's Estate, if half (1/2) of the mortgage was paid off and the mortgagor still owed the remaining half of the total loaned amount?

Have a good day and thank you.
 


anteater

Senior Member
2. If a Decedent (the mortgagee) had real property (separate from above) which is titled to an individual/company (the mortgagor). How would this add to the value of the Decedent's Estate, if half (1/2) of the mortgage was paid off and the mortgagor still owed the remaining half of the total loaned amount?
The amount still owed to the decedent would be an asset of the estate.

1. If a Decedent owned real property and half (1/2) of the property value was owned by the bank (mortgage loan). Would the total assessed value of the real property be counted or would just the equity of the home count in a Decedent's Estate?
Well, if the bank held a mortgage, the bank does not actually "own 1/2." But, if I am reading the ORC correctly, the outstanding principal is a deduction from the gross estate's value.

5731.16 Deductions - funeral and administration expenses, and debts.
(A) For purposes of the tax levied by section 5731.02 of the Revised Code, the value of the taxable estate shall be determined by deducting from the value of the gross estate amounts for the following:

(1) Funeral expenses;

(2) Administration expenses, excluding the value of any money or property set off and allowed under section 2106.13 of the Revised Code, to the extent that such expenses have been or will be actually paid;

(3) Claims against the estate that are outstanding and unpaid as of the date of decedent's death;

(4) Unpaid mortgages on, or any indebtedness in respect of, property if the value of the decedent's interest in the property, undiminished by the mortgage or indebtedness, is included in the value of the gross estate, as are allowable by the laws of this state.

(B) There shall be deducted in determining the taxable estate amounts representing expenses incurred in administering property not subject to claims which is included in the gross estate, to the same extent such amounts would be allowable as a deduction under division (A) of this section if such property were subject to claims and such amounts are paid before the expiration of the period of limitations provided for in section 5731.38 of the Revised Code.

(C) The deduction allowed by this section in the case of claims against the estate, unpaid mortgages, or any indebtedness, when founded on a promise or agreement, is limited to the extent that they were contracted bona fide and for an adequate and full consideration in money or money's worth, except that in any case in which any such claim is founded on a promise or agreement of the decedent to make a contribution or gift to or for the use of any donee described in section 5731.17 of the Revised Code for the purposes specified in that section, the deduction is not so limited, but is limited to the extent that it would be allowable as a deduction under section 5731.17 of the Revised Code if the promise or agreement constituted a bequest.

(D) Any income taxes on income received after the death of the decedent, or property taxes not accrued before his death, or any estate, succession, legacy, or inheritance taxes, shall not be deductible under this section.
 

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