Do I have to file a state tax return and/or pay taxes on the sale of a home that I inherited from mother?

Get Legal Help Today

 Secured with SHA-256 Encryption

Do I have to file a state tax return and/or pay taxes on the sale of a home that I inherited from mother?

Mom lived in IA and died in 11/10. Mom bought home a 1-1/2 years prior for $458,500. I live out-of-state and haven’t lived in IA for over 20 years. There was a Will and probate; all creditors paid off. Estate under 750,000. I inherited the home and sold it 5 months later in 03/10 for $455,500 (court deeded to me; I quit claimed to buyers; both occured same day). After paying off the mortgage and costs of sale, I ended up with a little over $100,000. Tax appraised value on the home (if that matters) was about 20K more than what I sold it for. I’ll report it on federal, but what about IA?

Asked on November 24, 2010 under Estate Planning, Iowa

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You have to report income on both your state and federal returns.  But there seems to be a few steps here that you have left out to make an assessment of what happened.  Was the mortgage paid off?  Was it sold in a short sale?  You need to have the documentation reviewed by an accountant here and to ask him or her what needs to be done.  Generally speaking the estate pays the taxes on the property when it is part of the estate.  It might have been better to have the estate sell the property and then pay all taxes and then have you reap the rewards.  But without really seeing what was done here it is hard to answer this.  Good luck.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption