Inheritance/Tax question

SuhrThang

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My son passed away. No will, no spouse or dependents. His estate consists of $300k paid off home in New Mexico. His mother and I want the house to go to his sister. She lives in Arizona. The house will be sold after probate.

That said, I have no idea about taxes related to all this. Will talk to an estate lawyer.

Will there be inheritance tax? Will she be taxed on the proceeds of the sale? She's in low tax bracket. I'm really not sure what questions to ask yet.

Any feedback would be appreciated. Tks

“A drunkard’s dream if I ever did see one”

Tecolote

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In reply to SuhrThang • 5:24p, 6/7/24

AG

SuhrThang said:
My son passed away. No will, no spouse or dependents. His estate consists of $300k paid off home in New Mexico. His mother and I want the house to go to his sister. She lives in Arizona. The house will be sold after probate.

That said, I have no idea about taxes related to all this. Will talk to an estate lawyer.

Will there be inheritance tax? Will she be taxed on the proceeds of the sale? She's in low tax bracket. I'm really not sure what questions to ask yet.

Any feedback would be appreciated. Tks

Very sorry to hear about your loss. Very tragic to lose a son.

I live in NM and my estate/tax attorney is

Dan Pick
Albuquerque, NM
(505) 883-0679

He's a good one to use or talk with.

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Casey TableTennis

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In reply to SuhrThang • 6:18p, 6/7/24

AG

I don't believe NM or AZ have an inheritance tax. Also, if the house is worth more than when bought, likely a "step-up" in basis. If property is sold for around the current price, little to no capital gains on sale would be expected.

Intestate is what you'll talk to the attorney about, which is dying without a will. New Mexico has specific intestate rules. Assuming no spouse or kids, parents inherit everything. If you don't want it, and only one sibling, the sister, you may be able to "disclaim" your interest. If other siblings that gets more complicated.

Hope this gives some direction as you have conversation no parent should be having. Hang in there!

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Monywolf

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8:26p, 6/7/24

Very sorry for your loss.

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OldArmyCT

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4:01a, 6/8/24

AG

No will, you'll need an estate attorney to probate. Everything likely to go to the parents but if you want the sister to have everything just disclaim and defer to her. The only tax possibility will be on the sale of the house and the tax is on the difference between the house value when he died vs. the value when it's sold, i.e. most likely nothing. Sister can pay the lawyer out of the sale priceeds.

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Mas89

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In reply to SuhrThang • 7:39a, 6/8/24

AG

Maybe he did have a will you will find soon leaving his estate to his sister…
Sorry for your loss.

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YouBet

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In reply to SuhrThang • 10:47a, 6/8/24

AG

SuhrThang said:
My son passed away. No will, no spouse or dependents. His estate consists of $300k paid off home in New Mexico. His mother and I want the house to go to his sister. She lives in Arizona. The house will be sold after probate.

That said, I have no idea about taxes related to all this. Will talk to an estate lawyer.

Will there be inheritance tax? Will she be taxed on the proceeds of the sale? She's in low tax bracket. I'm really not sure what questions to ask yet.

Any feedback would be appreciated. Tks

Neither New Mexico nor Arizona have an estate or inheritance tax.

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Pinochet

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In reply to Mas89 • 9:25p, 6/8/24

Mas89 said:
Maybe he did have a will you will find soon leaving his estate to his sister…
Sorry for your loss.

This is an underrated response. Finding something like that could save a lot of trouble, especially if no one is worried about the will being contested.

If you don't find something like this in the house over the next few months, you'll need an attorney with some experience in gift tax. This stuff can get complicated if you have to inherit the house and then give it to his sister.

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Agsinheart

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11:39p, 6/8/24

if there's no will like you said, definitely everything automatically goes to parents but if you want the sister to take everything get an estate attorney to help file deferral and disclaim the property so that the sister can get it, I don't know much about taxes though but you should be asking the attorney this question. I hope there's a will somewhere where it's written that He gave it to his sister, it would save a lot of stress, sorry for your loss.

gigemhilo

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10:47a, 6/10/24

AG

Very sorry for your loss.

There should be no tax implications on either the inheritance, or the sale of the house (stepped up basis). Make sure you have a good CPA handle the final tax return and your daughters tax return as well. The daughters tax return will should show the actual sale of the house.

birdman

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3:55p, 6/10/24

The house is just an asset. It matters where he lived. Each state will have their own set of rules. Look up Laws of Intestacy for the state he lived in.