[upstatedoc]

Alright, I'm just trying to save the $300 to consult an accountant. And I've already run this by a family friend who is an accountant but it was on the golf course and we were drinking and I haven't heard from him since. Here's the deal: Due to the sale of a piece of family property we will be receiving a check for about $90k soon. Some say since it is an inheritance we do not have to report it to the IRS thus no tax paid. I'm very wary of this and wondering if any of you guys have any experience with this sort of thing. As usual, serious and wise-ass remarks are welcome. Yes, I know this belongs in first world problems.

[hl0m4n]

as they say 2 things in life are certain: death & taxes.

in your situation, i am 99% you still have to pay taxes on the $90k . only way out is if the property was under your name for a minimum of 5 years.

[MrPrena]

Yes, you got to pay estate taxes.

[kscarrol]

Not a lawyer or tax expert but my understanding was that something like the first $5.3 million of the estate was tax free so in theory the property was inherited without having to pay estate taxes. Subsequent to receiving the property, you (and other heirs) have now sold the property and are recognizing a capital gain on the sale. So, if you inherited the property first, then sold for a profit, you owe tax on the $90k of profits. If the property was sold before inheriting and sold for more ($90k) than the value, that $90k might me tax free.

Bottom line: it depends on the timing of when the property was inherited and when it was sold for a profit...

[m3ray]

Yo, listen to Andy.

[upstatedoc]

Originally Posted by m3ray

Yo, listen to Andy.

I owe you a beer.

[m3ray]

Originally Posted by upstatedoc

I owe you a beer.

Only if it's Bohemia style beer

Seriously though, I think there is such a gift rule for the IRS. Look it up, you may be in the clear.

[Maestro]

it depend on the state, there may not federal tax liability but their could still be estate tax liability within the state you live in or where the property is at.

You can easily find a copy of turbo tax it has questions around this type of transaction and you can easily answer all the question and punch in the numbers and see what it say is your tax liability. Also Turbotax has a great FAQ section on there community board the question most likely has already been answer. I usually state there when I have any type of personal or small business tax question.

[kscarrol]

Yes, gifts are allowed by the IRS. Each individual can annually gift something like $12-$13k tax free to another individual. And you can do that for multiple individuals...

Bottom line: I still think the timing is the issue for you but spend the $300 to get a qualified opinion from an expert as opposed to a bunch idiots on the OT forum!

[upstatedoc]

Decided to call my local IRS office for assistance.

You can't speak to a real person. I actually called 3 semi-local IRS offices and it was the same thing. Real helpful. I even called the tax advocacy office to see if they could help. No real people there either. Website is also useless.

[kscarrol]

Help? From the IRS?

$90k is a lot of money, get this wrong the penalty from the always helpful IRS could be a lot more than $300... Spend the money and get the professional advice!

[upstatedoc]

10 4

[P1]

Originally Posted by upstatedoc

10 4

For $400 you can have a CPA do your taxes for the entire year. At least, that is what my wife and I pay.

[Whostheboss]

Originally Posted by kscarrol

$90k is a lot of money, get this wrong the penalty from the always helpful IRS could be a lot more than $300... Spend the money and get the professional advice!

[upstatedoc]

Originally Posted by P1et

For $400 you can have a CPA do your taxes for the entire year. At least, that is what my wife and I pay.

We had our accountant friend do our taxes 2 years ago. Charged us $300!! I thought at least we would get a discount. Then he tells me he uses turbo tax to do his own taxes!!

[Maestro]

Originally Posted by upstatedoc

We had our accountant friend do our taxes 2 years ago. Charged us $300!! I thought at least we would get a discount. Then he tells me he uses turbo tax to do his own taxes!!

Unless you have very interesting tax situations Tubotax does a really good job. I use use a CPA when my wife had a home base business and they charge us $500 since we have lots of stock transaction and stuff as well. One year I decide to see if Turbotax would be any better or worse then what the CPA did, the they came out the same and since they I do all my own taxes with Turbotax and been doing it for 15 yrs and never had any issues. It does take time though, but Since I also use quicken for all my finance I just import everything from quicken to turbotax answer a few questions and I am done. A couple of hours worth of work.

[ska///235i]

If this was a primary resident, then no tax

Have proof that you lived there for at least 3yrs within the past 5 years

[kscarrol]

OP clearly states this is an inheritance and therefore not the sale of a primary residence...