Articles Tagged with Cost Basis

What are the Taxes When Inheriting an Out of State Vacation Home?

Published on: August 15, 2018 | By McCulloch & Miller, PLLC

When the family vacation home is passed from one generation to the next, there are certain tax issues to be aware of, particularly the step-up in basis. However, there may also be state taxes.

The first part of understanding the tax responsibility when you plan on giving it to your family vacation home to adult children who live out of state, is to understand the definition of “basis” and “step-up in basis.” These terms refer to income taxes and are used to determine any gains or losses on the sale of the property.

When you die, property that you own or control is valued as of the date of death. The children who inherit the property take it with that value as their basis. The first thing is to determine the parent’s basis in the property. You should then look at how the basis of inherited property is handled. Generally, the basis of property inherited from a decedent is one of the following:

Houton Families: Going Back To Basis

Published on: March 12, 2014 | By McCulloch & Miller, PLLC

Recent tax law changes are turning traditional estate planning on its head. Indeed, moves long considered savvy–for example, aggressively shifting wealth to younger generations while senior family members are still alive or leaving assets to a “bypass” trust–may no longer be necessary to save estate tax and could now leave many families paying income tax they wouldn’t otherwise owe.

The beast – the estate tax – is not dead. Nevertheless, that multi-headed monster is far tamer these days. On the other hand, there is another less obvious tax monster that you cannot afford to ignore.

The capital gains tax.