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Property Inheritance
Stepped-up basis is an incredible benefit to people who inherit property. Not only do they receive the property itself, the basis or cost value of the property becomes the fair market value at the time of the decedent’s death. This avoids recognizing the gain between the decedent’s cost and what it is worth when it […]
Property Inheritance
Stepped-up basis is an incredible benefit to people who inherit property. Not only do they receive the property itself, the basis or cost value of the property becomes the fair market value at the time of the decedent’s death. This avoids recognizing the gain between the decedent’s cost and what it is worth when it […]

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Stepped-up basis is an incredible benefit to people who inherit property. Not only do they receive the property itself, the basis or cost value of the property becomes the fair market value at the time of the decedent’s death. This avoids recognizing the gain between the decedent’s cost and what it is worth when it is inherited.

If a person had purchased a home for $100,000 and 20-years later when they died, it was worth $500,000, there would be a potential gain in the property of $400,000. However, because of a tax provision called step-up tax basis, the person inheriting the property will have a basis of the fair market value at the time of death.

The recipient could sell the property for $500,000 and have no taxable gain on the sale.

A formal appraisal is the most reliable and defensible estimate of fair market value at the time of the decedent’s death. There will be a fee of several hundred dollars for the appraisal. Another alternative is to get a broker’s opinion of value in writing. It may be reasonable to get three opinions to see if they are similar. They should rely on comparable sales to justify their position. Either method is acceptable to IRS.

There is discussion from the current President about the possibility of eliminating the step-up in basis that allows families to leave assets to their heirs without having to pay capital gains tax. Some people consider it to be a tax loophole for the ultra-rich but it can impact ordinary people who inherit property and do not want to have to sell it.

An example would be a family farm that when inherited by the heirs may not be able to afford to pay the capital gains tax due at time of transfer and they could be forced to sell the property or borrow the money to pay the tax, assuming that was possible.

Federal estate tax is paid from the deceased’s remaining estate, not by the heir. If the decedent’s estate is approaching the limit before estate taxes are due, currently $11.7 million, professional tax advice should be considered because there could be additional provisions in play. More information on this can be found on IRS.gov.

LIST OF BLOGS

3615 Janet Rd, Silver Spring, MD 20906

Price: $450,000 3615 Janet Rd, Silver Spring, MD 20906 MLS #: MDMC2007786 Tax ID #: 161301237522 Ownership Interest: Fee Simple Structure Type: Detached Levels/Stories: 3 Waterfront: No Garage: No Beds: 4 Baths: 2 Above Grade Fin SQFT: 1,566 / Assessor Price / Sq Ft:...

5851 Riverside Dr, Woodbridge, VA 22193

Price: $425,000 5851 Riverside Dr, Woodbridge, VA 22193 MLS #: VAPW2000446 Tax ID #: 8091-29-4817 Ownership Interest: Fee Simple Structure Type: Detached Levels/Stories: 2 Waterfront: No Garage: No Beds: 4 Baths: 3 Above Grade Fin SQFT: 1,040 / Assessor Price / Sq Ft:...

15762 Edgewood Dr, Dumfries, VA 22025

Price: $449,900 15762 Edgewood Dr, Dumfries, VA 22025 MLS #: VAPW2004188 Tax ID #: 8190-67-1092 Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 3 Furnished: No Waterfront: No Garage: No Beds: 0 Baths: / 1 Above Grade Fin SQFT:...

5432 New London Park Dr, Fairfax, VA 22032

Price: $493,500 5432 New London Park Dr, Fairfax, VA 22032 MLS #: VAFX2010734 Tax ID #: 0772 19 0302 Ownership Interest: Fee Simple Association: HOA Structure Type: Interior Row/Townhouse Levels/Stories: 3 Waterfront: No Garage: No Beds: 3 Baths: 2 / 2 Above Grade Fin...

6000 Wilmington Dr, Burke, VA 22015

Price: $735,000 6000 Wilmington Dr, Burke, VA 22015 MLS #: VAFX2009428 Tax ID #: 0783 11 0119A Ownership Interest: Fee Simple Association: HOA Structure Type: Detached Levels/Stories: 2 Furnished: No Waterfront: No Views: Garden/Lawn, Street, Trees/Woods Garage: No...

12489 Selkirk Cir, Bristow, VA 20136

Price: $390,000 12489 Selkirk Cir, Bristow, VA 20136 MLS #: VAPW2004086 Tax ID #: 7495-92-6669 Ownership Interest: Fee Simple Association: HOA Structure Type: Interior Row/Townhouse Levels/Stories: 3 Waterfront: No Garage: No Beds: 2 Baths: 2 / 1 Above Grade Fin SQFT:...

1203 Weatherstone Ct, Reston, VA 20194

Price: $625,000 1203 Weatherstone Ct, Reston, VA 20194 MLS #: VAFX2010768 Tax ID #: 0112 10070034 Ownership Interest: Fee Simple Association: HOA Structure Type: Interior Row/Townhouse Levels/Stories: 3 Furnished: No Waterfront: No Views: Garden/Lawn, Lake, Other,...

5312 Arapaho Ln, Alexandria, VA 22312

Price: $600,000 5312 Arapaho Ln, Alexandria, VA 22312 MLS #: VAFX2010758 Tax ID #: 0723 34 0134 Ownership Interest: Fee Simple Association: HOA Structure Type: Interior Row/Townhouse Levels/Stories: 4 Waterfront: No Garage: Yes Beds: 3 Baths: 3 / 1 Above Grade Fin...

22893 Adelphi Ter, Sterling, VA 20166

Price: $540,000 22893 Adelphi Ter, Sterling, VA 20166 MLS #: VALO2004334 Tax ID #: 024450607000 Ownership Interest: Fee Simple Association: HOA Structure Type: End of Row/Townhouse Levels/Stories: 3 Waterfront: No Garage: Yes Beds: 3 Baths: 2 / 1 Above Grade Fin SQFT:...

11503 Rabbit Run Ter, Silver Spring, MD 20904

Price: $509,900 11503 Rabbit Run Ter, Silver Spring, MD 20904 MLS #: MDMC2007770 Tax ID #: 160503337020 Ownership Interest: Fee Simple Association: HOA Structure Type: Interior Row/Townhouse Levels/Stories: 3 Waterfront: No Garage: Yes Beds: 3 Baths: 2 / 2 Above Grade...

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