estate vs individual income tax NY
My dad's estate (1/2 NY co-op - the other 1/2 is already mine) will be distributed to me by myself as the administrator. I intend to sell (never having lived there, the capital gain tax is unavoidable).
I believe the cost basis for this new 1/2 will be stepped up as inheritance, but the older half's will be the original, lower.
My choice is:
1. first change the title to 100% my name and then sell
2. sell straight out of the estate as my 50-50 partner
What's more advantageous? Will the long capital gains rates be the same on Schedule D of forms 1041 and 1040? Will NY state treat them the same, too?
1 Answer from Attorneys
Re: estate vs individual income tax NY
Should be irrelevant either way. You get stepped-up basis for the portion inherited from Dad, so his 1/2 should produce no gain or loss if sold for inherited basis. Only gain will be on your share previously owned, as long-term capital gain, with maximum tax of 15% of net gain. For title purposes, it might be better to have title in one name, although this is also secondary, as the new Deed from you and the Estate will get the title into the Buyer's name. All that seems to be involved is the recording fee from the Estate to you.
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