Should a 101-year-old sell her real estate now or leave it for heirs to sell? The tax implications are complicated
My mother, who will be 101 later this year, is leaving me real estate in her trust. The value of it is $4.5 million. She has other assets that will put her estate over $5 million when she passes. I currently have an offer from someone who wants to buy the real estate. Is it better for her to sell it now and reduce the value of her estate? She has never exercised the option for the one-time sale of her primary residence tax free.
Since 1998, however, taxpayers have been able to exempt as much as $250,000 of capital gains from the sale of their primary residence as long as they owned and lived in the home at least two of the prior five years. Taxpayers can use this exemption as often as every two years. Clearly, your mom needs to find a source of good tax advice, such as a CPA or other tax professional. If you have the authority to act on your mother’s behalf through a power of attorney or legal conservatorship, then you should seek the tax pro’s advice as her fiduciary.Under current law, if she retains the real estate it would get a “step up” to the current market value as of her death. That means all the appreciation that happened during her lifetime would never be taxed.
That tax bill has to be weighed against the possibility that her estate could owe taxes. The current estate tax exemption limit is $11.7 million, an amount that will continue to be adjusted by inflation until 2025. In 2026, the limit is scheduled to revert to the 2011 level of $5 million plus inflation. President Biden has proposed lowering the limit to $3.5 million and modifying the step up, but those ideas face stiff opposition in Congress.
An estate planning attorney could discuss other options for reducing her estate if she’s still with us as 2025 approaches. The tax pro probably can provide referrals.
México Últimas Noticias, México Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Hot Housing Market Lets Banks Sell Mortgage RiskA red-hot housing market is enabling banks to sell a new kind of bond that shares the risk of mortgage and loan defaults with institutional investors.
Leer más »
Billionaires Can’t Get Enough of 220 Central Park SouthWhy is One57 flailing while 220 Central Park South is soaring? kvelsey reports
Leer más »
Adam Driver Turns Into a Centaur in Burberry Ad You Have to See to Believe - E! OnlineAdam Driver's new shirtless Burberry campaign is here. Let's just say it's one you need to see for yourself.
Leer más »
Biden's talk of vaccine mandates sends labor into disarrayA steep divide has emerged among labor unions — as well as between members and leaders — over whether to require workers to be vaccinated
Leer más »
Black Woman Selling Hair Products Doesn't Want 'Karen' To Be CanceledThe Black woman selling hair care products doesn't want 'Karen' who accused her of drug deal to be canceled.
Leer más »