{"id":1516,"date":"2024-08-12T18:42:30","date_gmt":"2024-08-12T18:42:30","guid":{"rendered":"https:\/\/www.usataxhelp.com\/en\/?p=1516"},"modified":"2024-08-12T18:42:35","modified_gmt":"2024-08-12T18:42:35","slug":"gifted-versus-inherited-property","status":"publish","type":"post","link":"https:\/\/www.usataxhelp.com\/en\/our-tax-blog-at-wwwirstaxtalkcom\/general\/gifted-versus-inherited-property\/","title":{"rendered":"Gifted versus Inherited Property"},"content":{"rendered":"\n
If property is GIFTED, the receiver of the gift never pays a tax. The giver of the gift has to deal with gift taxes.<\/p>\n\n\n\n
If property with a basis (original cost plus improvements<\/em>) is $200k and the property sells for $500k, there is a $300k profit and is taxable.<\/p>\n\n\n\n
If instead the property is INHERITED, the receiver of the property takes it into their inventory of stuff at the Date of Death Value.<\/p>\n\n\n\n
If the property was sold immediately after death is it a good bet the property was worth whatever it sold for\u2026..<\/p>\n\n\n\n
That would not cause any taxes to be paid. In fact probably would be a loss because of closing costs.<\/p>\n\n\n\n
Now let\u2019s say the inheritance was 5 years ago when the property was worth $350k (that is the Date of Death Value).<\/p>\n\n\n\n
Now it sells for $500k. There is a $150k taxable long term capital gain.<\/p>\n\n\n\n
The above is true for anyone living in the United States. Notice I did not say citizen\u2026 it is anyone living in USA.<\/p>\n\n\n\n
In the inheritance example we would have a foreign tax credit for whatever tax was paid to the foreign government.<\/p>\n","protected":false},"excerpt":{"rendered":"
If property is GIFTED, the receiver of the gift never pays a tax. The giver of the gift has to deal with gift taxes. If property with a basis (original cost plus improvements) is $200k and the property sells for $500k, there is a $300k profit and is taxable. If instead the property is INHERITED, […]<\/p>\n