How could I limit tax liabilities when inheriting property? 12 Answers as of August 07, 2015

Are their less tax implications upon my mother’s death if my mother’s rental property is owned jointly by me before her death?

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Sebby Law Office
Sebby Law Office | Jayne Sebby
If the value of the properties is not great, you won't need to pay federal estate tax. Whether or not you'll need to pay state estate taxes will depend upon which state the properties are located in. However, if you and your mother are "joint tenants" of the properties, they would automatically come to you upon her death. You might also look into setting up an LLC or a corporation for the properties to reduce or limit tax liabilities.
Answer Applies to: Nebraska
Replied: 8/7/2015
Ronald K. Nims LLC | Ronald K. Nims
The tax affect of inheriting an interest in property is that your tax basis of the property is the fair market value on the date of death. That will increase your depreciation and/or reduce any gain on sale. There aren't any negative tax aspects of inheriting property.
Answer Applies to: Ohio
Replied: 8/7/2015
Law Offices of Richard M. Levy P.C.
Law Offices of Richard M. Levy P.C. | Richard M. Levy
These type of questions are too complex to be answered in this type of forum. Consult with an attorney.
Answer Applies to: New York
Replied: 8/6/2015
Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
Clearly your mother is in need of some estate planning, with or without your help. Properly done, actions can be taken to minimize inheritance taxes. One of those potential means might be to transfer some of the property to joint ownership. It is also possible that could make matters worse. Seek counsel with the details.
Answer Applies to: Michigan
Replied: 8/6/2015
O'Keefe Legal Services, L.L.C.
O'Keefe Legal Services, L.L.C. | Sean P. O'Keefe
In Maryland, it depends on what type of tax you mean. If the property (and "gross estate") is below the threshold to be taxed for estate tax purposes, then it's often better for tax basis and capital gain (income tax) purposes to pass the property at death (to receive a "step up" in tax basis) instead of giving an interest in the property during life (where the donor transfers the tax basis).
Answer Applies to: Maryland
Replied: 8/6/2015
    James Oberholtzer, Attorney at Law
    James Oberholtzer, Attorney at Law | James Oberholtzer
    No, and there can be more. If you own the property jointly, there may be an issue of whether the property gets a full step up in basis at her death. On the other hand, there is no gift tax in Oregon, so, if her estate is more than $1 million, the lifetime gift to you could reduce the amount of taxes owed at her death for estate tax. You need to compare the amount of tax owed on the capital gain in the property versus the Oregon estate tax saved. Usually the value of the basis step up is much more valuable. So, it makes sense for most people to keep ownership of all of the property in her estate.
    Answer Applies to: Oregon
    Replied: 8/6/2015
    Patrick W. Currin, Attorney at Law | Patrick Currin
    You have it backwards; if you are given the property (ideally via a trust) then you get the property with the basis stepped up to FMV on the date of death.
    Answer Applies to: California
    Replied: 8/6/2015
    Ashcraft & Ashcraft, Ltd.
    Ashcraft & Ashcraft, Ltd. | Randall C. Romei
    The estate tax implications are not affected by transferring the property to as the surviving joint tenant or in a distribution under a Will. The asset is part of your mother's estate. The capital gain you experience could be affected. The property will have a basis equal to its value at the time of death if you receive it as a distribution under a Will. The basis will be unchanged if you receive it as the surviving joint tenant. The difference in the basis could affect the capital gain tax due upon sale.
    Answer Applies to: Illinois
    Replied: 8/6/2015
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    No, and maybe, but first, this is a complex question that should properly be answered in a general review of your mother's whole estate plan. Other than real property taxes, taxes aren't assessed on individual parcels, they are assessed on the whole of the estate. If your mother gives you an interest in property prior to her death, this creates the need to file a gift tax return. No gift tax would be due, but the gift would reduce the amount of property that your mother could transfer at her death free of federal estate tax so no net benefit for federal estate tax. Such a strategy may reduce Oregon estate tax, but there are many other very real effects of such a transaction. Again, your mother's estate plan should be reviewed by a knowledgeable estate planning lawyer to get the best results.
    Answer Applies to: Oregon
    Replied: 8/6/2015
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Consult with your accountant.
    Answer Applies to: California
    Replied: 8/6/2015
    Wellerstein Law Group, P.C.
    Wellerstein Law Group, P.C. | Elisha Wellerstein
    No. You will receive your mother's half with a step up in basis, so when it is sold you only have to pay capital gains on half of the appreciated value until her date of death.
    Answer Applies to: New York
    Replied: 8/6/2015
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    It is probably too late. Since you took title as a joint tenant her estate will lose the step up in basis for your not her. Address the issue with your accountant to see if it would pay to try to unwind the transfer. This is opinion is solely based upon the facts presented in the inquiry. Additional facts may be important and may change the analysis. If you are uncertain, seek legal counsel. We are not your attorneys. This answer is being offered to assist you in determining if you need to retain legal counsel to assist you, not to resolve your issue through an email inquiry.
    Answer Applies to: Nevada
    Replied: 8/6/2015
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