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Old 09-16-2010, 10:31 AM
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Selling Inherited Property

Recently my mother and her sister were given ownership of some property that their mother had deeded to them. One sister would like to sell the property to the other since she does not have any use for this property. Since the initial sale of the property was $1.00 from mother to daughters and the mother has since died, what tax consequences will the seller have if it is sold for $45,000 to other sister. The state is TN and the county is Davidson (Nashville).

Thanks
JB



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Old 10-29-2010, 08:25 AM
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" Since the initial sale of the property was $1.00 from mother to daughters and the mother has since died, what tax consequences will the seller have if it is sold for $45,000 to other sister"---> Actually, your aunts( your mom's sister) and your mom received the property as a gift( your grandma sold her daughters for $1) before she , your grandma, passed away. So the basis of the portion of the property for your aunt is the ORIGINAL COST, I mean the cost when she received it from her mom, NOT FMV at that time; it was a gift, not esate property. So,if she sells the portion of the property, then the amount of the LTCG will be; $45,000, FMV- the original cost; Assume that the original cost of the portion of the property was $5,000 and the current FMV is $45,000, as you said, then LTCG is $45,000-$5,000=$40,000;then your aunt is subject to her LTCG tax to both Federal( if her tax bracket is over 15%, then she shold pay 15% of the LTCG) and TN governments( she should 2.4% on her LTCG).


Last edited by Wnhough : 11-02-2010 at 03:10 AM. Reason: to corfrect it


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