Taxes on inherited property
LIST Code: ES-02-12-02-00
LIST Code
ES-02-12-02-00
Title
Taxes on inherited property
Definition
Legal issues related to how capital gains tax applies when real estate or other property is transferred at death. This also includes when children or others were added to title before the owner’s death. It also includes understanding the difference between lifetime gifts of property (which generally transfer the original tax basis) and transfers at death (which often provide a step-up in basis to fair market value at date of death). Legal questions may involve partial interests, joint tenancy, community property rules, gift tax considerations, and documentation needed to determine basis. Tax treatment varies based on ownership structure and federal and state law. Includes: - Step-up in basis at death - Capital gains consequences of adding children to title of property - Lifetime gift versus inheritance tax treatment - Joint tenancy and transfer-on-death deeds - Calculating basis for inherited real estate - Tax planning considerations for family homes