Author Topic: Inherited Property Taxes  (Read 276 times)

accolay

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Inherited Property Taxes
« on: October 08, 2018, 03:39:25 PM »
I have inherited a share of a small property in Canada with a number of other parties and I'm wondering about taxes in the US and Canada if we sell the property.

As far as I understand capital gains in the US would be assessed at the same rate as my current tax bracket. Is this correct? I am most unsure about Canadian taxes.

Also wondering if anyone knows if there would be any change in property tax rates if we kept the property.


terran

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Re: Inherited Property Taxes
« Reply #1 on: October 08, 2018, 03:59:28 PM »
I don't know about the foreign aspect, but if you had inherited land in the US it would receive stepped up basis to the value as of the date of death of the decedent, and you would pay tax at capital gains tax rates for any increase in income from the date of death until when you sold it. As long as it was purchased by the decedent at least one year before you sell you would be paying at the long term capital gains rate, if not then short term. I suspect this will also be true in your case, but I don't know, so hopefully someone familiar with the foreign aspect will comment.

hoping2retire35

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Re: Inherited Property Taxes
« Reply #2 on: October 10, 2018, 06:36:06 AM »
I don't know about the foreign aspect, but if you had inherited land in the US it would receive stepped up basis to the value as of the date of death of the decedent, and you would pay tax at capital gains tax rates for any increase in income from the date of death until when you sold it. As long as it was purchased by the decedent at least one year before you sell you would be paying at the long term capital gains rate, if not then short term. I suspect this will also be true in your case, but I don't know, so hopefully someone familiar with the foreign aspect will comment.

Just to clarify, IIRC, do you maintain original basis if it is gifted to each generation(before death)? So great-grandpa buys some land for $100, gives to son, gives to son, gives to you, you sale for $100k and the gain is $99,900, right?

pbkmaine

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Re: Inherited Property Taxes
« Reply #3 on: October 10, 2018, 06:41:41 AM »
I don't know about the foreign aspect, but if you had inherited land in the US it would receive stepped up basis to the value as of the date of death of the decedent, and you would pay tax at capital gains tax rates for any increase in income from the date of death until when you sold it. As long as it was purchased by the decedent at least one year before you sell you would be paying at the long term capital gains rate, if not then short term. I suspect this will also be true in your case, but I don't know, so hopefully someone familiar with the foreign aspect will comment.

Just to clarify, IIRC, do you maintain original basis if it is gifted to each generation(before death)? So great-grandpa buys some land for $100, gives to son, gives to son, gives to you, you sale for $100k and the gain is $99,900, right?
https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/property-basis-sale-of-home-etc