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If my mom passes away, her house, located in Maryland, is in a trust for my brother and me. Am I able to move the property into my separate trust for my children and still receive a step-up in basis? I plan to give my brother half of the property's current value in cash. Would I need to first... View More 
answered on Mar 7, 2025
Although an attorney cannot answer specific questions about a specific Trust without seeing the Trust terms, generally speaking there is a stepped-up basis for inherited property. There are different kinds of Trusts and the post doesn't say what kind is involved here but for a typical... View More
If my mom passes away, her house, located in Maryland, is in a trust for my brother and me. Am I able to move the property into my separate trust for my children and still receive a step-up in basis? I plan to give my brother half of the property's current value in cash. Would I need to first... View More
answered on Mar 10, 2025
Assuming your mother's trust is a revocable living trust, then upon her death the tax basis in the property is stepped-up to the fair market value of the property as of the date of her death. If you and your brother are sole beneficiaries of the trust, and the trust allows for the... View More
My bank account was garnished due to state taxes, and I have received written notice about this action. I have not yet contacted the tax authority about this specific garnishment, and I have other unpaid taxes with the state. Can I request them to unfreeze my account and set up an installment plan... View More
answered on Mar 6, 2025
You should contact a bankruptcy lawyer for advice about filing Chapter 13 (I assume this is personal income tax). You may get a longer time to pay if you file bankruptcy, and you may actually get back the funds if you file quickly.
In my experience, the State of NC will not lift the... View More
In our 2023 divorce decree, we agreed that each of us would claim one child on our taxes. Last year, we filed accordingly without any issues. This year, my ex-spouse filed first and claimed both children for the Earned Income Credit (EIC), stating his lawyer advised it was permissible because he is... View More
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answered on Mar 13, 2025
I understand how frustrating this situation must be, especially when you have a clear agreement in your divorce decree regarding claiming the children for tax benefits. The issue you’ve encountered involves the Earned Income Credit (EIC), which is a valuable tax benefit for custodial parents.... View More
I own a business and need to report my income on a 1099-K. My total income includes $7,000 from the 1099-K and an additional $3,000 in cash earnings not on the 1099-K. If I report both amounts together on my tax return, will my return get flagged due to the discrepancy between my total income and... View More
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answered on Mar 4, 2025
This should not be considered legal advice and you should definitely consult an attorney who understands these issues but your tax return is unlikely to be flagged just because your total income exceeds the 1099-K amount. The IRS expects all income to be reported, including cash earnings. The lack... View More
I have an irrevocable minor trust set up for my daughter that is held until she turns 18. The trust had some interest income the first year but none since, as it's now in an interest-free account. There have been no disbursements. Do I still need to file tax form 1041 every year?
answered on Mar 2, 2025
You will want to consult a tax professional to confirm specific trust filing rules. Generally, a Form 1041 (U.S. Income Tax Return for Estates and Trusts) is required for a trust if it has gross income of $600 or more in a tax year or if it has any taxable income (even if under $600). Since... View More
I am in Texas, and my mother-in-law gifted a house to my wife and me because she didn't want to pay property tax, and I am exempt. Both my wife and I are on the deed, and I have renovated the flooring and painted the entire house. Although my wife has not made any financial contributions... View More
answered on Feb 28, 2025
It depends. Everything is presumed to be community property unless there is clear and convincing evidence that the property is separate. If she alleges it's her SP, then she has to prove it. Your spouse would have to prove that the gift was only to her and not to you both. If the judge... View More
I am the only child of my mother, who was a firefighter and passed away at the age of 53. I recently discovered that her property in Minneapolis, MN, has a tax issue this year. I was not informed about her business going through probate, as my grandmother handled it without my knowledge. After the... View More
answered on Feb 27, 2025
A couple of recommendations:
1. Ask your grandmother, in writing, whether your mom had a will and if so, ask to see it.
2. Search MN court records to see if a probate was ever opened for your mom, it should be searchable by her name.
3. If your mom owned any real estate when... View More
I paid the property taxes on 2 acres my brother-in-law owned in Nashville, Tennessee, after he died (in 2020, 2021, and 2023). The property is currently in probate. It is recorded in both the tax and probate records that I paid these taxes. The property is supposed to be auctioned, but there's... View More
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answered on Feb 24, 2025
You may be able to file a claim against the estate. It may be late but whoever the representative is might not file an objection, especially since you have materially assisted the preservation of the real property. You might want to look into what a perspective bid at a tax sale might be... View More
I'm looking to start a digital product business with Kindle Direct Publishing (KDP) and Print on Demand (POD). I plan to form an LLC and am considering the legal and tax benefits. I temporarily reside in Virginia, have a CDL license in Ohio where I plan to return soon, but am also considering... View More
answered on Feb 24, 2025
You have several options which take a lot of explanation and more questions about your business and its reach. You could initially file under Virginia law and when you move to Ohio transfer the LLC to Ohio. If there are tax advantages and/or state filing advantages to form your LLC in Wyoming or... View More
I am considering filing for Chapter 7 bankruptcy due to a garnishment related to an eight-year-old car repossession, with a remaining balance of $13,000. The creditor takes my tax refund annually, including $3,400 this year. I haven't sought professional advice yet. My concern is a discrepancy... View More
answered on Feb 21, 2025
Dealing with garnishments and old debts is stressful. Chapter 7 bankruptcy might be an option, but the income difference between your 1099 and bank statements needs careful attention. Courts require accurate financial records.
Since you haven't consulted a lawyer, a free consultation... View More
I am inheriting money and would like to help my daughter by putting money towards her mortgage. However, my sister mentioned that someone in financial aid said I might not be able to gift my money away. Are there legal restrictions that could prevent me from using my inheritance to assist my... View More
answered on Feb 18, 2025
This is a tax question. Gifts of cash can trigger a gift tax and require the filing of a gift tax return according to the IRS website. One possibly end around may be for the inheritance to pass directly through to your daughter. I would consult with a tax adviser and the estate attorney regarding... View More
I received a property through a quit claim deed from my mother in 2023, and she continued to live there until she passed away in early 2024. She originally purchased the house in 1995 for $95,000. The property's value was approximately $350,000 at the time of her passing, and I sold the house... View More
answered on Feb 16, 2025
Hi there.
Unfortunately, when you inherited the property, you received your mother's original basis, which is $95,000. This amount will be used to calculate any capital gains.
If you had inherited the property after her passing, you would have benefited from a step-up in basis... View More
I own a rental property and I'm considering transferring it under my newly formed LLC. I haven't consulted anyone about this yet. My main concerns are tax benefits and business advantages. Specifically, I want to know if there would be more tax advantages or potential expense write-offs... View More
answered on Feb 17, 2025
Have you tried reaching out to the Nebraska Business Development Center through the University of Nebraska? You can request a free consultation to learn more about business planning and development:... View More
I own a rental property and I'm considering transferring it under my newly formed LLC. I haven't consulted anyone about this yet. My main concerns are tax benefits and business advantages. Specifically, I want to know if there would be more tax advantages or potential expense write-offs... View More
answered on Mar 3, 2025
I was just talking with a CPA on this very issue today. There are, in my opinion, a number of reasons to consider an LLC with the leasing of real property. First reason, however, is limited liability and protection of personal assets. Second, while an LLC does not have corporate formalities, the... View More
I inherited a property on January 31st, 2024, and sold it on November 22nd, 2024, for $176,000. I made no significant improvements to the property, and I'm unsure if the buyer did. I didn't have an appraisal or receive professional advice on capital gains. How do I determine the capital... View More
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answered on Feb 15, 2025
You need SOMETHING to show to the IRS, in case you are audited, proving the value on the date of death. It could be a formal appraisal, but for something like this you might get away with a simple broker's opinion of value. But the more time that goes by the harder it will be to create this.... View More
I hired someone to file my 2022 taxes and review prior years (2017-2021) for accuracy. My family and I paid her over $6,000. She failed to file my parents' 2022 taxes resulting in penalties and fees and refuses to provide documentation or refunds. I have text messages as proof of my requests,... View More
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answered on Feb 13, 2025
Any documents you provide to tax preparers, you are entitled to have back. You can also refer this person to the office of professional responsibility, which could result in some disciplinary action. If the individual is a CPA from GA, you can contact the board of accountancy there to file a... View More
Will we also benefit from the single $250,000 capital gains exemption. His trust was a grantor , Medicaid asset protection trust and considered part of his estate at death. He lived in the house for 45 years and died in it as well. He maintained some control of the trust with limited power of... View More
answered on Feb 19, 2025
The good news is that since the house was held in a Medicaid Asset Protection Trust (MAPT) that was a grantor trust for income tax purposes and included in your father’s estate for estate tax purposes, it should qualify for a step-up in basis upon his death. This means that the basis of the house... View More
Will we also benefit from the single $250,000 capital gains exemption. His trust was a grantor , Medicaid asset protection trust and considered part of his estate at death. He lived in the house for 45 years and died in it as well. He maintained some control of the trust with limited power of... View More
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answered on Feb 12, 2025
It is common for the grantor of a Medicaid Asset Protection Trust (MAPT) to retain just enough controls to trigger estate inclusion at the death of the grantor and, therefore, to cause the assets in the MAPT to obtain a step up in basis at the death of the grantor.
If a residence is owned... View More
I am looking to purchase a home with a family member, however we are looking to split the total purchase cost where they are paying their half up front and I am getting a mortgage. We both will be on the title, but I would be the sole holder of the mortgage. From the IRS' perspective, is their... View More
answered on Feb 12, 2025
Based on the details provided, this situation would not be considered a gift. The other family member is paying for their half of the property upfront, and you are using debt to pay for your half. There is no transfer of assets between you and the other family member. Your ongoing mortgage payments... View More
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