Q: Hi If A Deceased Persons House Sells For $500,000 & Is To Be Split 6 Ways , Will This Money Be Taxed? & if Yes How Much?
The House Was Sold In California LA County & We Are Trying To Figure Out How Much It Will Be Taxed & How Much Exactly Each Of The 6 Beneficiaries Will Get
A:
If a deceased person's house sells for $500,000 and is to be split among 6 beneficiaries, there may be tax implications depending on several factors.
In California, there is no state inheritance tax, but there may be federal estate tax if the value of the deceased person's estate is over a certain threshold (currently $11.7 million for individuals or $23.4 million for couples). However, if the deceased person's estate is under the threshold, then there will be no federal estate tax.
Additionally, there may be capital gains tax if the house increased in value from the time the deceased person acquired it until the time it was sold. The capital gains tax would be based on the difference between the sale price and the cost basis (typically the original purchase price plus any improvements or renovations made). The capital gains tax rate can vary based on factors such as the length of time the property was owned and the tax bracket of the beneficiaries.
To determine the exact amount of taxes owed and the amount each beneficiary will receive, it is recommended to consult with a tax professional who can evaluate the specific details of the situation and provide personalized guidance.
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