Taxes on sale of deceased parents home
Mother passed away and left everything in a living trust for 7 children . Her home is about to be sold and was wondering if we need to pay taxes on the amount of money that we will all receive from this sale.
Terry Says
No, this is your inheritance — and unless it was well over $11 million (!), you don’t have to pay taxes. The home will receive a “step-up” in basis to the value at date of death. So there won’t be any taxes on the gain. I’m sure the “successor trustee” of her living trust is getting legal advice on making distributions from the trust. If the children were beneficiaries of an IRA, the rules are slightly different – -and they should each roll their portion into an inherited IRA of their own — and keep the money growing, subject to distribution rules.
