Q: Our mother just passed away and left her paid off home to divide between their 4 kids,it just sold
She lived in Florida where her house is and I live in Pennsylvania,will I have to pay any taxes at all after settlement when the money is divided up ? also do you have to add it to your income when you file your yearly taxes ? thanks in advance
A: If your mother had established domicile in Florida prior to her death and assuming this is not a Federal taxable Estate, then there should be no inheritance or estate taxes due . Usually when property is included in Estate it will get a step up in basis of the property equal to the fair market value on the date death. If the property is sold at or below that value, then there would be no gain so no income tax due on the sale. If property is sold at a higher value there would be income tax due on the gain since the date of death. The executor should meet with an attorney or CPA to determine if better to recognize any gain on an income tax return for the estate or to distribute the gain to the beneficiaries. Since in Florida may be better to put any gain on the Estate's return.
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