Gene E. Utterback, EA wrote:
- quote -

I have a problem with that interpretation. If it were a
sale "outside" of the estate, then the beneficiaries would
be the sellers and would have to consent to the [real
estate] transaction - and thus this beneficiary would know
about it.

It seems to me that the estate itself sold the property and
is now distributing the income. As inherited property, your
share of the profit is a long term capital gain, not
"ordinary" income, regardless of which entity sold it.

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Seth Breidbart <sethb[at]panix.com> wrote:

- quote -

You're probably right about that. Hopefully others (with
greater knowledge than I) will confirm.

MTW

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Michael T Wing CPA <mtwingcpa[at]yahoo.com> wrote:

- quote -

Worse: wouldn't the basis be the value at the time of
death, _less_ the value of the life estate?

Seth

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BCUC <spam[at]spam.spam> wrote:

- quote -

As others have mentioned, you need to find out exactly what
happened here. My GUESS (and that's all it is) is that your
grandmother left your aunt (her daughter?) a "life estate"
in the property, meaning that she (your aunt) was entitled
to live there for the rest of her life. But, your
grandmother likely left the actual ownership of the property
(subject to the life estate provision) to members of the
next generation (ie: YOU). This kind of a scheme is not
uncommon.

If that is the case, then I beleive your "basis" in the
property would be based on the value at the time of your
grandmother's death. If sold later at a gain, you (and other
grandchildren, I presume) would be taxed on your share of
the gain. Note that you were NOT taxed on your share of the
value recieved at the time of your grandmother's death.

MTW

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BCUC <spam[at]spam.spam> wrote:

- quote -

Didn't you own about 15% of it? So what do you mean by
"signed over to my aunt"? Presumably, she had control, but
you inherited some ownership. (If the check came from your
grandmother's estate, then that estate would have been the
owner.)

- quote -

Less fees, taxes, etc. I presume.

- quote -

That seems reasonable.

- quote -

Then why did you get any money when it was sold?

- quote -

I think you owned about 15% of it, and when you inherited
that, your share was worth around $6,000. When it was sold,
your share was $15,000, the remaining $9,000 being
appreciation _after_ it was inherited.

- quote -

The amount you inherited ($6,000 value) wasn't taxed. The
increase in value since then is taxed.

- quote -

Why don't you pay the taxes out of the $15,000 check you
got?

Seth

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spam[at]spam.spam (BCUC) wrote:

- quote -

If the property increased in value between the death of your
grandmother and the day it was sold, the heirs owe tax on
the increase in value.

- quote -

That's a political argument, not a statement of tax law.

The value of the property as of the date of death is passed
to the heirs tax-free. You are being taxed on the increase
in value after death.

--
D.F. Manno
dommanno[at]netscape.net
"They that can give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
(Benjamin Franklin)

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spam[at]spam.spam (BCUC) wrote:

- quote -

When did you aunt die? What was it worth when she died?
What was your percentage ownership?

If the property was worth $63,000 when your aunt died, then
it all makes sense.

You inherit the property based on the value at the date of
your aunth's death. If it is later sold for more than that
amount, the rest will be taxable capital gain.

Stu

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- quote -

It is possible that you do indeed have capital gains in
that amount IF say your share upon grandmothers death was
worht about $6000 but by the time the estate actually sold
it it was up to $15,000

However if such is not the case then I would ask the
executor to explain the reference to a "profit." The
executor really should know this stuff

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"BCUC" <spam[at]spam.spam> wrote:

- quote -

You need to go back and get a better understand of what
really happened. I suspect that while the asset was part of
the estate, the sale was made outside of the estate - by the
people who inherited the property. Depending on when/how
the property was valued and when it was sold, it is possible
that there was some gain that you need to pay tax on.

I am not sure what you mean by "real estate transaction"
saying you have a gain. Was this a 1099-S? If so, it only
reports you share of the sale price, not your gain. If it
was a worksheet it should show your basis in the property
and your share of the sale price. You may indeed have a
gain of $9,083.84. However, if this property was inherited
your tax hit for the gain should max out at 15%. So your
tax due for this shouldn't be more than $1,362.58. And
since you got a check for $15K you certainly have (had)
enough funds to cover the taxes due on this.

The best thing you can do is to get to a tax pro in your
area and go over your situation in sufficient detail so that
they can see exactly what happened. Without the detail,
there is no way for any of us to give substantive guidance.

Good luck,
Gene E. Utterback, EA

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I received an inheritance check for $15,000 from my
grandmother's estate. The property was signed over to my
aunt in 1989, valued at $38,000. The property sold in 2003
for $104,000. I received a real estate transaction saying
that I made a $9,083.83 profit. This was not my property, it
was my aunts. This was an inheritance, so why am I getting a
statement saying that I made a $9,083.83 profit on something
I didn't own or sell? This WILL be taxed, and I will be the
one paying. Inheritances should not be taxed for the
beneficiaries. The lawyer didn't say anything about this
when she cut our checks. If you need to know, I live in
Virginia.

Please help me! I will need to take out a BIG loan to pay
for this. It's going to cost my siblings and I dearly.

Thank you very much for your time.

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