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Inheritance Tax

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DAYHIPPIE

Guest
What is the name of your state?What is the name of your state? california
my mom & dad owned their hom jointly and its paid for . mom passed away in january 2004. we're getting his will , etc. , made out and he is leaving the house to me and we want to know if theres anything special we should do to avoid any kind of taxes thereof , inheritance or otherwise? also on personal items ? appreciate any tax advice about wills and inheritances
 


Dandy Don

Senior Member
You need to have exact figures of what your inheritance will be before you can do tax planning. If it's less than $1.2 million, then much of it will be exempt from federal taxes, but you might have some state taxes to pay. You will need to talk to a local certified public accountant or tax accountant to figure out the best way to figure/save taxes.

DANDY DON IN OKLAHOMA ([email protected])
 
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ollie w. holmes

Guest
It all depends on how much your father's estate is worth at the time of his death. Since you can't predict that yet, it's difficult to say how much you can shield from estate taxes. The federal trigger point in 2004 is $1.5 million. It will go up in subsequent years but may go down as well depending on what congress does.

In the meantime, get deeded as a JTWROS or JTIC. Write some checks out to the county for real estate taxes, pay the homeowner's insurance, improvements, etc. Just paying for the upkeep can lower your father's basis in the property, and increase yours. He can give you the cash you layout back, under the table.

Set up joint bank and brokerage accounts with your father. The more you mingle funds, the harder it is to tell who owned what. Besides, this places more of his assets out of the probate process. JTWROS is the most powerful way to avoid probate. Placing his estate under the scrutiny of the state is an extremely dangerous course, should defects be found in the will (due to poor drafting or obsolescence). You could have your inheritance in the house compromised. This is no time to be cheap. A good estate lawyer or tax accountant can help you plan for an orderly future, as Don said.
 

divgradcurl

Senior Member
Write some checks out to the county for real estate taxes, pay the homeowner's insurance, improvements, etc.
Only improvements can change the basis or give someone more "ownership" of the property. Paying for upkeep and taxes, or even interest on the mortgage, does not change the percentage of ownership. Only payments to principal or payments for improvements can change the percentage of ownership.

In the meantime, get deeded as a JTWROS or JTIC.
This can be good way to avoid probate taxes, because transfer of the house bypasses probate. However, if your father's estate is below the statutory exemption, then you wouldn't pay probate taxes anyway, and you would lose the "step-up" in basis by going through probate, so joint tenancy isn't always the best choice.

As Don said, you need to talk with a tax accountant.
 

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