inheritance

[hsommer]

What is the name of your state? Missouri
My husband's grandmother passed away and has left her estate to my husband's mother. Part of the estate includes grandma's house which is going to be sold. Mother-in-law would like to sell the house and split the earnings with my husband and his sister...will we have to pay taxes on this as though it was a cash gift...or as trustee of the estate can Mother-In-Law delegate that the house is to be given to my husband and his sister and then estate tax laws would apply? Don't know much about any of this...any response would be great. Thanks!

 

[divgradcurl]

will we have to pay taxes on this as though it was a cash gift

Yes. But remember, the gift tax is applied against the giver, not the recipient. Mom will have to file a gift tax return with her taxes next year, although the actuall tax due on the gift will not actually be paid until Mom dies, then it comes out of her estate.

or as trustee of the estate can Mother-In-Law delegate that the house is to be given to my husband and his sister and then estate tax laws would apply?

No.

Depending on how much money we are talking about, it might be worthwhile to sit down with a probate lawyer or tax lawyer to see if there is a way to minimize the tax burdens here, while still distributing the estate as desired.