Transfer on Death
I added my three daughters to deed of my house will they have to pay inheritance tax when they sell the house.
Terry Says
Is your house your only asset? You really should consult an estate planning attorney to set things up properly.
YOU will not owe any Federal estate taxes unless your estate is over about $14 million. But depending on where you live, you might owe state inheritance or estate taxes. And attorney could explain.
Your children will inherit your house and their new “cost basis” will be the value on the date of death. If the quickly sell it and divide the proceeds, no one will owe any taxes.
BUT, if you are ill and cannot handle your own affairs, you should create a power of attorney to let them sell the house if the money is needed for your care. If you own it individually, you can exclude $250,000 of gains from taxes if you sell it before you die.
So yes, it’s better to wait to distribute the asset until after your death. But you need to make plans, just in care you need the money.
