Inheritance Tax, etc.

[breezymom]

What is the name of your state (only U.S. law)? NY

My head HURTS from trying to research all this so...here goes.

My grandmother passed away. She left her home to my uncle and me.

My uncle is going to end up gifting his half to me.

What the bloody heck will/may I have to pay tax-wise...? For example do I pay an inheritance tax based on half the home's value?

I'm not selling the home. I'll be living in it.

And could I possibly mortgage the house to pay the inheritance tax? My head seriously hurts trying to figure this all out, especially looking at the forms I'm looking at and trying to figure them out and wondering where the heck I'm going to get that much money when I'm not actually selling it. The house is not valued at even $50k, according to the city, but that data is at least two years old.

 

[anteater]

What forms are you looking at?

New York does not have an inheritance tax. It does have an estate tax. But the value of the estate has to be valued at more than $1 million before tax is due.


EDITED TO ADD: I thought this sounded familiar and, now that I look, it is. I gave you the same answer 3 months ago.

 

[breezymom]

Well, I was doing some researching since a lady with whom I work said that some friends of hers ended up having to pay a pretty hefty tax...but they had sold the home. My parents are paying tax on money they inherited this past year...so all this stuff is why I'm confused.

And yes...I'm looking at the estate tax forms. Specifically the 706 and ET706 forms.

If there is nothing for state...what about federal?

 

[anteater]

The exemption for federal estate tax was $5 million for deaths occurring in 2012.

 

[breezymom]

So, what is likely to have to be paid, if anything, is a gift tax, then, by my uncle?

Can I take an aleve and stop thinking about it, in other words, and just focus on the astronomical state and city real estate taxes? lol

 

[breezymom]

What can I say? It's been a really LONG three months...I should have looked at my own profile. I thought I had posted it but...well, as you can see, my brain is fried from everyone telling me different crap.

 

[LdiJ]

What is the name of your state (only U.S. law)? NY

My head HURTS from trying to research all this so...here goes.

My grandmother passed away. She left her home to my uncle and me.

OK

My uncle is going to end up gifting his half to me.

That could be a problem, your uncle could end up owing gift tax if he does that, or at least having to file a gift tax return that counts against his lifetime exclusion for gifting. It might be better for him to refuse that part of his interitance.

What the bloody heck will/may I have to pay tax-wise...? For example do I pay an inheritance tax based on half the home's value?

I'm not selling the home. I'll be living in it.

I don't practise in NY, so the best I can tell you is that if NY has inheritance tax, then you are going to be paying inheritance tax on whatever you inherit. You won't pay any federal inheritance tax, and there won't be any estate taxes unless the value of the estate is high. (which does not appear to be the case)

And could I possibly mortgage the house to pay the inheritance tax? My head seriously hurts trying to figure this all out, especially looking at the forms I'm looking at and trying to figure them out and wondering where the heck I'm going to get that much money when I'm not actually selling it. The house is not valued at even $50k, according to the city, but that data is at least two years old.

Yes, you could possibly get a loan to pay the inheritance tax. However, if the value of the estate is low, you might not owe inheritance tax.

Get yourself a consult with a local tax professional.

 

[breezymom]

LdiJ: What I had read for NY state was confusing...I'm remembering my earlier thread, though, after reading anteater's posts. We will be going over things with some sort of professional eventually, but with as vindictive as some folks in my life are, I can get a little antsy. And you know about whom I am writing. My mother and uncle talked it over long before my grandmother passed concerning the gifting and my uncle is quite monetary savvy, so I'm sure he knows and understands his options, but I know we will consult some sort of professional. I'm just trying to look at my tight budget for the year and even the next few months.

 

[anteater]

That could be a problem, your uncle could end up owing gift tax if he does that, or at least having to file a gift tax return that counts against his lifetime exclusion for gifting. It might be better for him to refuse that part of his interitance.

When one disclaims, one does not get to direct where the bequest goes.

 

[LdiJ]

When one disclaims, one does not get to direct where the bequest goes.

Yes, of course, but based on what the OP wrote I was assuming that she and the Uncle were the only beneficiaries. If that is not correct, then that would change things.

 

[anteater]

Yes, of course, but based on what the OP wrote I was assuming that she and the Uncle were the only beneficiaries. If that is not correct, then that would change things.

But when one disclaims, one is treated as predeceasing the testator. Where the disclaimant's bequest would go would depend upon the provisions of the will. Or, if there are no provisions dealing with the possibility of a predeceased beneficiary, New York's anti-lapse statute.

Judging from the value mentioned, the possible reportable gift would be pretty minimal.

 

[LdiJ]

But when one disclaims, one is treated as predeceasing the testator. Where the disclaimant's bequest would go would depend upon the provisions of the will. Or, if there are no provisions dealing with the possibility of a predeceased beneficiary, New York's anti-lapse statute.

Judging from the value mentioned, the possible reportable gift would be pretty minimal.

I do agree. Now that a value has been mentioned it would be pretty minimal.