Selling a House During Probate/Taxes

[Loricarbo]

My sister and I inherited my cousin's house in S.F., California, and we are in the process of selling it during probate. I should note that even though my cousin passed away in 4/2000, the house is just now being sold. After probate, when we receive our money from the sale, will the taxable capital gains already be paid (out of my cousin's estate)? What kind of taxes will my sister and I be liable for when we receive the X-amount of dollars from the sale of the house?

Any information regarding this situation will be greatly appreciated.


Loricarbo
([email protected])

 

[ALawyer]

It depends on the total size of the estate (was it Federally taxable?) and if so, whether the Will provided for payment of taxes from the residuary estate or pro-rata.

If the former then there are no estate taxes you have to share. BUT the value as of the date of death or 6 months later chosen by the executor/personal representative determines the basis you hold in the property you sell. If it sold for more, less your expenses related to the sale, you may owe Federal and CA long term capirtal gains tax on the increase in value.

 

[Loricarbo]

Another Question

I'm not really sure about the taxes. I do not have a copy of the will. We did receive a copy of the "Supplemental Amendements to Petition for Preliminary Distribution and for Allocation of Estate Taxes." This document states: "The CA and federal estate taxes due in the estate total $33,764, which has been paid. Said sum is based on a total taxable estate of $805,812, of which the sum of $146,863 represents non-probate assets of the decedent. Based on the foregoing sums, petititoner has calculated each beneficiary's pro rata share of estate tax liability as follows:". It then lists the sums for each distribution. We received this document prior to selling the house. The value listed on this document is $89,000 less than we got for the house.

So, what exactly does this mean? I guess I am pretty dense when it comes to tax questions.

Thanking you in advance.

Loricarbo
[email protected]

 

[ALawyer]

IT looks to me as if you owe a share of the estate tax as it says "Based on the foregoing sums, petititoner has calculated each beneficiary's pro rata share of estate tax liability as follows:" Divide the estate tax value of the house by the value of the "taxable estate of $805,812" and that's the share of the $33,764 you may have to pay to the executor, but a lawyer or accountant would have to see evereything to tell you definitively.

And you'll owe capital gains tax on the $89,000 gain LESS SELLING EXPENSES -- the difference between the tax basis on the estate tax valuation and the NET sale price you received. An accountant is needed.