Capital gains tax on inherited houses

[nanajeanne]

Dad died and because his will is general (split everything between three daughters) we are told that his two houses are not part of the estate. So when we sell the houses which are still in his name, how do the capital gains tax laws work? How do you spit this tax three ways? Live in North Carolina.

[LdiJ]

Originally Posted by nanajeanne

Dad died and because his will is general (split everything between three daughters) we are told that his two houses are not part of the estate. So when we sell the houses which are still in his name, how do the capital gains tax laws work? How do you spit this tax three ways? Live in North Carolina.

Who is telling you that his houses aren't part of his estate? What explanation are they giving you for that? Because that doesn't seem accurate to me unless you are all already listed on the houses as joint tenants with right of survivorship.

Capital gains would only be the excess of the sales price over basis. However, without knowing the answers to the above question its hard to explain what your basis might be.

[seniorjudge]

Originally Posted by nanajeanne

Dad died and because his will is general (split everything between three daughters) we are told that his two houses are not part of the estate. So when we sell the houses which are still in his name, how do the capital gains tax laws work? How do you spit this tax three ways? Live in North Carolina.

How EXACTLY is the title to the land listed on the deed?

Wills (at least well-drawn ones) are always general. You want a will drawn up that will work if you die tomorrow or fifty years from the date you sign it.

Thus, in the will, he should've left real property (for example) to you three without specifying exactly which real property it was.

What does your probate attorney say about your situation? It sounds like you will need the will probated.

[nanajeanne]

After dad died and we went to the clerk of court to begin the whole estate thing we were told that because dad's will did not specifically state that the houses were to be left to the three daughters they were not part of the estate. His will simply said that all of his possessions were to be split evenly between the three of us. The deeds have his name on them and are free and clear. We are not listed on the deeds at all. I know that capital gain taxes are paid on the difference between the purchase price and the selling price but am not sure how this will work in this case. We did not purchase the properties. They became ours because dad died. If we sell the properties and it is determined that we must pay capital gains tax how will that be spit three ways. This is all very confusing.

[anteater]

Originally Posted by nanajeanne

After dad died and we went to the clerk of court to begin the whole estate thing we were told that because dad's will did not specifically state that the houses were to be left to the three daughters they were not part of the estate.

North Carolina must have some very strange probate laws..... Or some very strange court clerks.

The deeds have his name on them and are free and clear. We are not listed on the deeds at all..... They became ours because dad died.

How are you going to sell them if your father's name is still on the deeds?

Anyway, after you figure out how to get ownership transferred to you and your siblings, the capital gains thing is simple. Your cost basis is the fair market value of the properties on the date of your father's death. Which means, if you sell them reaosnably soon, there likely won't be much capital gain. If each of you own one one-third, then one-third of the cost basis, one-third of the net selling price, and one-third of any capital gain goes to each of you.

[LdiJ]

Originally Posted by anteater

North Carolina must have some very strange probate laws..... Or some very strange court clerks.


How are you going to sell them if your father's name is still on the deeds?

Anyway, after you figure out how to get ownership transferred to you and your siblings, the capital gains thing is simple. Your cost basis is the fair market value of the properties on the date of your father's death. Which means, if you sell them reaosnably soon, there likely won't be much capital gain. If each of you own one one-third, then one-third of the cost basis, one-third of the net selling price, and one-third of any capital gain goes to each of you.

I agree with the above, and I think that the three of you would be very foolish not to get a probate attorney involved in this case.

[seniorjudge]

Originally Posted by nanajeanne

...After dad died and we went to the clerk of court to begin the whole estate thing we were told that because dad's will did not specifically state that the houses were to be left to the three daughters they were not part of the estate....

Next time, ask the janitor. You will probably get a better answer.