California.
Hi, so my uncle and his son sadly passed away in a house fire about a year ago. His house was in a trust which was left to his sister (my Mom) so nothing too complicated there. Obviously we are now attempting to sell the property but know that it isn't worth the market value due to the condition of the property (it would need to be completely gutted) and are targeting a developer who will buy the property due to the value of the lot and knock the house down.
The house at last market value was worth around 500k and a developer has offered us 250k because he says it'll cost him 200k to build a new house and the fact that death occurred there makes it harder to sell on. He also said if we sold it for a lot more than 250k (I personally was hoping we could get about 350k for it) the capital gains tax would mean we probably wouldn't be left with much more than 250k anyway.
So I have some questions; Am I correct in thinking that the capital gain rules for an Inherited Property are different and they don't count what the property was originally purchased at (I believe to be around 30k in the 70's) but what is it worth at the time it is Inherited? If so then capital gains should not really affect us? How do we even work out the value of the property in this condition for capital gains?
Also, is it correct that the 3 year disclosure is from the date of death? In which case we'd only have 2 more years before it doesn't have to be disclosed?
I know that nobody here can give me an accurate assessment of the value of the property but I have no idea whether 250k is a fair offer considering the damage or the lots value means we should be able to command a lot more. Anyone with any experience in selling fire damaged properties that could give me some advice would be appreciated.
Thanks!
Hi, so my uncle and his son sadly passed away in a house fire about a year ago. His house was in a trust which was left to his sister (my Mom) so nothing too complicated there. Obviously we are now attempting to sell the property but know that it isn't worth the market value due to the condition of the property (it would need to be completely gutted) and are targeting a developer who will buy the property due to the value of the lot and knock the house down.
The house at last market value was worth around 500k and a developer has offered us 250k because he says it'll cost him 200k to build a new house and the fact that death occurred there makes it harder to sell on. He also said if we sold it for a lot more than 250k (I personally was hoping we could get about 350k for it) the capital gains tax would mean we probably wouldn't be left with much more than 250k anyway.
So I have some questions; Am I correct in thinking that the capital gain rules for an Inherited Property are different and they don't count what the property was originally purchased at (I believe to be around 30k in the 70's) but what is it worth at the time it is Inherited? If so then capital gains should not really affect us? How do we even work out the value of the property in this condition for capital gains?
Also, is it correct that the 3 year disclosure is from the date of death? In which case we'd only have 2 more years before it doesn't have to be disclosed?
I know that nobody here can give me an accurate assessment of the value of the property but I have no idea whether 250k is a fair offer considering the damage or the lots value means we should be able to command a lot more. Anyone with any experience in selling fire damaged properties that could give me some advice would be appreciated.
Thanks!