What a mess in NJ!!!

[lamb888]

What is the name of your state? New Jersey.
My mother passed away in March 2006. Can anyone tell me if we (my 3 older sisters and me) have to pay Estate tax, on the 3 houses she left behuind, plus the vacant lot?
We are planning to sell everything, and split it 4 ways.
But, our accountant told us that we need to pay this tax by the 8th month, then, after we sell all of the property, we will have to pay again!
Does anyone know if this is correct??????

 

[anteater]

What is the name of your state? New Jersey.
My mother passed away in March 2006. Can anyone tell me if we (my 3 older sisters and me) have to pay Estate tax, on the 3 houses she left behuind, plus the vacant lot?
We are planning to sell everything, and split it 4 ways.
But, our accountant told us that we need to pay this tax by the 8th month, then, after we sell all of the property, we will have to pay again!
Does anyone know if this is correct??????

Well, New Jersey has an estate tax that is decoupled from the federal estate tax. If I remember correctly, the Jersey estate tax applies to gross estates valued at more than $675,000. So, if your mother's estate is valued at more than that, then there probably is an estate tax liability.

Your accountant probably meant that, when you sell the properties, you may have an income tax liability on any capital gains. But a capital gain or loss is the difference between your cost basis and the net sales proceeds. However, the heirs' cost basis is the value of the assets on the day that your mother passed away. Unlesss the assets have appreciated rapidly since then, it is likely that any income tax liability resulting from the sale will be fairly small.

 

[lamb888]

Thanks for your help!

Well, New Jersey has an estate tax that is decoupled from the federal estate tax. If I remember correctly, the Jersey estate tax applies to gross estates valued at more than $675,000. So, if your mother's estate is valued at more than that, then there probably is an estate tax liability.

Your accountant probably meant that, when you sell the properties, you may have an income tax liability on any capital gains. But a capital gain or loss is the difference between your cost basis and the net sales proceeds. However, the heirs' cost basis is the value of the assets on the day that your mother passed away. Unlesss the assets have appreciated rapidly since then, it is likely that any income tax liability resulting from the sale will be fairly small.

Thanks so much for your reply, that makes sence!