Legal Question in Tax Law in California

Re: Can I determine how much, if any, inheritance tax I will pay?

In general, an individual beneficiary does not

pay "inheritance" taxes. An U.S. Estate Tax

return (Form 706) is required on deaths of decedents

and California has an informational form. The amount

of estate tax is charged to the estate and the beneficiaries are

charged accordingly. Thus the answer to your questions

depends upon the valud of her estate.

Re: Can I determine how much, if any, inheritance tax I will pay?

Your inheritance is received tax-free from your mother's estate, and the basis of inherited assets is stepped-up to market value as of the date of her death. Thus, you would only be taxed if your brother is paying you more than market value for your inheritance, and the fair value is not reportable as income.

Best wishes,

LDWG

Re: Can I determine how much, if any, inheritance tax I will pay?

An inheritance is not considered taxable income. Also, the "basis" for the house is the its value at the time of death of your mother's death, therefore, there are no capital gains taxes.

Generally, if your mother had paid $50,000 (the basis) for the property, and it was worth $300,000 had she sold it, there would have been a capital gain of $250,000 (although there would have been no tax consequence for her, since it was a primary residence.

When she died, the basis automatically would have become the current value, or $300,000. When it was sold, in this case to your other sibling, you would consider the difference between the "sale price" and the $300,000.

If your sibling paid the other two $115,000 each because the value at the time of sale was higher, you could have a taxable capital gain of $15,000. If you only received 1/3 of the declared value at the time of death, you have no tax liability.