"steve-o" <igt123[at]optonline.net> wrote in message
news:e6ac8909-f852-46cb-82bd-32a8aa5d3984[at]t54g2000hsg.googlegroups.com...
- quote -

Federal income tax: 0
Federal estate tax: 0 (most likely; depends on lifetime gifts)

The actual sale of the asset within 6 months is generally considered its
fair market value, alternative valuation or not.

If there are any state level inheritance taxes, I have not addressed those.

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My sister passed away in August 2007. We hired a lawyer to settle her
estate. The state is NY. She had 2 assets that were of any real value
1. A brokerage account (around $ 200,000), and a house she bought in
2001.
The brokerage account was a TOD (transfer on death) the benefieciaries
were 50 % me, 50 % my father (she wasn't married). She did not have a
will. The lawyer asked us to open up an estate acccount (we did). We
sold the home in February of 2008 for 215,000. The house was estimated
at 215,000 - 225,000 around Ocober of 2007 when we had some real
estate agents come look at it. The proceeds of the house less the
mortage went into the estate account. My question is...how much tax do
we on the sale of the house? Don't we use the "step up value method"
My understanding from th IRS website is was we use the FMV of the
house at the time of death. the IRS publications are confusing to say
the least....then I read somewhere that I use the value my sister paid
for the house back in 2001+ improvements to arrive at FMV.. so what
I'm asking is what value do I use for the purpose of the fiduciary
return and tax purposes? of course FMV at time of death would amount
to a fraction of the tax as opposed to paying tax on the price she
paid + improvements. Thanks in advance.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >