sell of inherited property how much texes I have to pay?

[elcla]

Hi!
My mother passed away on Oct,01 2001.In her trust she wanted we (her 4 kids) to have equal shares of her property plus she gave one year for my youngest sister to stay on this property and she stayed. The property was sold in November,2005 by executris and I got $98 000 as my share. How much I owe in taxes to IRS on these money? Oregon state

 

[LdiJ]

Hi!
My mother passed away on Oct,01 2001.In her trust she wanted we (her 4 kids) to have equal shares of her property plus she gave one year for my youngest sister to stay on this property and she stayed. The property was sold in November,2005 by executris and I got $98 000 as my share. How much I owe in taxes to IRS on these money? Oregon state

Nothing. Any taxes related to the sale of the property would have been paid by the executris, on behalf of the estate, prior to its distribution to the heirs.

However, that goes for federal taxes and the IRS. Your state tax rules may be different.

 

[abezon]

The estate has probably been closed for a few years. The executrix should have created a trust & gotten an EIN for the trust. The trust has to file a 1041 'final return'. When it does that, the capital gains will be passed to the heirs via K-1 statements. If the trustee withheld taxes, they will be reported on the K-1. The gains flow from the K-1 to your Sch.D & you pay the taxes on your personal 1040. If this is not the trust's final year of operation, the trust pays the taxes (at a higher rate!) & the beneficiaries pay nothing.

 

[LdiJ]

The estate has probably been closed for a few years. The executrix should have created a trust & gotten an EIN for the trust. The trust has to file a 1041 'final return'. When it does that, the capital gains will be passed to the heirs via K-1 statements. If the trustee withheld taxes, they will be reported on the K-1. The gains flow from the K-1 to your Sch.D & you pay the taxes on your personal 1040. If this is not the trust's final year of operation, the trust pays the taxes (at a higher rate!) & the beneficiaries pay nothing.

Its not a given that the estate was closed. Its equally likely that the estate was still open....maybe even more likely.

 

[abezon]

Estate or trust, the capital gains are allocated to principal and are taxed at the estate/trust level, except in the final year of operation, when the principal is distributed to the beneficiaries.

Estates are supposed to be closed within 2 years. If they aren't, the IRS demands a good reason why not. Hence my comment that the executor *should* have closed the estate & opened a trust under a separate EIN. Doubt it matters much, though.

 

[elcla]

more info

Hi!
Thank you LdiJ and abezon for your answers!!! I don't know what it means "the estate to be closed". The trust of my mother is revocable living trust and her estate was in California. I am living in Oregon, but I am working for California. What taxes I have to pay for receiving of my share? Thank you

 

[LdiJ]

Hi!
Thank you LdiJ and abezon for your answers!!! I don't know what it means "the estate to be closed". The trust of my mother is revocable living trust and her estate was in California. I am living in Oregon, but I am working for California. What taxes I have to pay for receiving of my share? Thank you

Again, on a federal level, nothing. However you must look to your state laws to see if anything has to be paid on the state level.