Q: My grandfather and I have jointly owned a property in PA for the last 2 year he just passed away will I owe taxes..
My grandfather and I have jointly owned a property in PA for the last 2 years. He passed away this year and the
property transferred solely in my name. Is there any kind of tax I will have to pay when I sell it. The land was purchased for 18k and we rebuilt the property form the ground up. Invested around 70k. Recently had an appraisal on the property for 130k and will be selling for 105k... this is not my primary residence.
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A: You might be subject to a capital gains tax. I would consult with an accountant.
A:
There will be a 4.5 % inheritance tax on the half that your father owned, and which passed to you. There will also be a capital gains income tax on the sale, which is measured on the gain over “basis.” “Basis” is, essentially, your cost of acquisition plus costs of documented improvements. With respect to the half that was your father’s, there is a “step-up” in basis because of the payment of inheritance tax. His half takes on the date of death value as its basis. If you sell the property for no more than the date of death value, there should be no capital gain assessed on your father’s half.
You should consult an accountant or attorney for further advice.
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