Mark Bole wrote:
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Check!

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Check!



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Will look into it!


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No state income tax.

Thanks all..

--
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kalanamak wrote:
[...]
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All I can offer is to repeat that you can and should report capital
gains from disposition of inherited property on your Schedule D,
regardless of whether any tax reporting form was ever sent to you or the
IRS by a third party.

While *you* may be sure you are paying as much or more than you "really"
owe, the IRS doesn't know that, so keep as much written documentation as
you can regarding property valuation and receipts/disbursements of cash,
in case they ask you for it during the open period after your filing
date (generally three years). If you attach a statement to your
original return, keep it as brief as possible, no one at the IRS will
read it anyway unless they select your return for examination.

Finally, you may need to make one or more quarterly estimated payments
(the next due date is 9/15/08) before the return due date to avoid
late-payment penalties. Don't forget any impact on your state taxes
also, some states do not have any special rate for capital gains.

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Mark Bole wrote:
- quote -

In the county the property is in, the assessment for property taxes is
lower than the price the property would sell for. I'm not in real
estate, but I work at a large institution and have heard story after
story of people getting 25 or 30% more than the county's property tax
assessment. However, the sister used this as a ball park for what it was
worth then, and what it is worth now (this was to her advantage....it
was clear if we wanted to buy the property it would be assessed and we
would have had to pay more). Additionally, a church had to get it's
share when the father died, and the executor paid off the church's share
as its percentage of the county's assessed value (for taxes), thus
adding the church's share to her percentage ownership.

- quote -

None was done. Hubby wasn't living near by and the executor just moved
in and stayed when the father died. Will was never finished, property
remained in dead father's name, sister paid the taxes and raised goats
on it.

Since the value of the property was probably more than X at time of
death, and we took less than the property value as pay-off this year,
I'm thinking we are "safe" in paying capital gain on half of it. If we
were claiming the amount the property was worth at time of death was
more than what is on the books for the county's assessment, in order to
show we had less capital gain, that might be less "safe".

My goal here is not to save every penny. I have deducted my bracket
income tax rate for half of the amount we got, and put it aside for when
I do our taxes next year. What was left over was sent on to hubby's
kids. *My goal is to NOT get into trouble with the IRS*. Anything I
over-pay (we are talking about a tax payment of 4000 bucks, not tens of
thousands) is money out of the daughter's pockets, not mine. All the
time, effort, insult-bearing, and soul-searching has been enough, I'm
not going through extra hoops for these girls. I just don't want to get
into trouble...

- quote -

Hubby signed over his interest in the property to his sister, in
exchange for money. All 3 other sibs and nieces are signing over their
share for an IOU (I knew we'd never get that money without going to
court, so insisted on money at time of signing...we will be hated for
life, but really I could care less). The reason this is moving forward
now, I think, is that she knew the assessed value was going up 24% from
2007 and 2008, and hence was eager to "lock in" on 2007 price (the last
week of November 2007, no less). She then did nothing on moving forward
on closing, as once she had the "locked in" price, any payment was her
money going out the door. I had to threaten to get her to give the
attorney the info he needed to contact all parties concerned, etc.

Given past history, I will not get any form from this sister in law
without calls and possibly threats. Should I just write this all out,
have my attorney give it a glance for proper lingo and tone, and send it
in with my 1040?

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Yes, not a trust.

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Our biggest crap shoot in life is who we are born to. I am grateful
daily for my genes and upbringing, and hubby is happy to have married
into a honest family who knows that good fences good neighbors make.

I am also grateful for your help.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

kalanamak wrote:
[...]
- quote -

"County assessment" is not necessarily the fair market value (FMV), for
example in California it typically is not even close for property held
any significant length of time. If you have other ways to determine your
basis (FMV on date of death), try to document them. This is an
imprecise activity to be sure, and it's hard to predict if you will ever
be challenged to prove your basis. The IRS instructions for Schedule D
state you are supposed to "attach an explanation of your basis" if you
don't use actual cost (which would be the case for inherited property).

A formal real estate appraisal at time of death would be best, otherwise
data on comparable home sales at that time, such as the "competitive
market analysis" that a real estate agent might provide, is also a good
source.

- quote -

Was the property sold by the estate and the proceeds distributed? Then
you should receive a Sched. K-1(1041) from the person who prepares the
estate income-tax return, which contains numbers you enter on your own
tax return. Or was the property ownership transferred to you and then
sold? Then you won't necessarily get any form, and yes you should just
report this on your Sched. D. The end result, income tax-wise, should
be the same.

States have different rules for handling estate property and probate.
Also, note that the IRS instructions for Form 1041 require estates that
are open for more than two years to attach an explanation for the delay
in closing the estate. This was an estate and not a trust, right?

- quote -

I think you mean, since you got less than what you think is your
rightful share of the inheritance, is that a deductible loss for tax
purposes? No. Since this amount was never included in your taxable
income, you can't deduct any "loss".

- quote -

It is very common for one or more siblings to behave abominably. If
there was any dysfunction in the family while they were growing up (and
let's face it, for most of us there was at least a little), it all comes
out and gets replayed.

-Mark Bole

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >

Okay, now that I've worked out how to word a statement that a gift is a
gift, I have a stickier question....

The money hubby gave his grown kids came from the settling of the estate
of his father. Daddy-o died almost a decade ago, and the personal
representative (sister to hubby) grossly breached her fiduciary duty
and, to make a long story short, we finally got some money 9.5 years
later. The county assessment of the property gave his share as X in
1999. When the estate finally settled county assessment was over 3X, but
we only got 2X (in order to avoid legal action to remove her as PR, or
other legal action, we took what she'd offer). So, we have capital gains
tax to pay on half of what we got.

Here is the question: Are we supposed to get a statement from the PR by
next 30 Jan for our 2008 taxes? What if it isn't forthcoming? Can I just
tell the IRS, truthfully, the amount the property was worth in 1999
(easy to prove), the amount we got (easy to prove), do the math and pay
my tax if a required statement is not forthcoming? After all the
pussy-footing, waiting, and insult-bearing, I'm not interested in
nagging this woman for a form she is unlikely to willingly give us.

I am assuming there is no "loss" claimable because we took an
under-market and under-county assessment amount.

I know that when my mother died last year, my brother, who'd rather cut
his hand off than be dishonest or unfair, settled things in a couple of
months, with all the math spelled out for all of us, and sent out tax
info. However, there was no real estate involved and he is not sure
about this situation.

BTW, I have coined a term after this terrible experience: financial
incest. This is when you do to family members what you wouldn't do to a
stranger, because the stranger would take you to court.

--
<< ------------------------------------------------------- > << 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. > << ------------------------------------------------------- >