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My mother in law inherited unimproved property 40 years ago. She wants to sell it now. She’s concerned about taxes. Will she have to pay capital gains tax, and if so, what is the rate?

My mother in law inherited unimproved property 40 years ago. She wants to sell it now. She’s concerned about taxes. Will she have to pay capital gains tax, and if so, what is the rate?

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[–] • 7 pts

Be very careful. Every county is different. Just go to a local real estate lawyer, pay the hundred bucks or so for the consulting fee. Your eyes will be open to the possibilities.

[–] • 3 pts

Bookkeeper popping in to agree with Swindler. Talk to a real estate attorney but also talk to a local real estate CPA (ideally one who also handles personal taxes in addition to real estate business tax). You'll want to know what the options are and what effects they can have in relation to her entire tax picture. Often a good niched CPA can refer to a good attorney and vice versa. It also doesn't hurt to talk to more than one. Most CPAs won't charge for an introductory/exploratory chat to see if you groove on them. Protip: if they're not willing to talk to you and your MIL in real words and insist on only using big accounting/legal terms, they're an ass. Move on to someone who's willing (and able) to talk like a regular human being.

Depending on how soon she wants to sell that land, though, keep in mind tax people are preparing for the busiest time of year. Either get a meeting set ASAP, or wait until May/June for an appointment.

[–] • 0 pt

She’s complaining about the cap gains. We told her to go see an accountant. Didn’t think about an attorney. Thanks.

[–] • 2 pts

Assuming you're in the U.S: She will almost certainly pay cap gains. When she inherited the property she would have received a stepped up basis to fair market value at the time of the decedent's death. They will be long term capital gains, with the rate being dependent on her total income in the year of sale. If it's a significant amount of money, hire an accountant.

[–] • 1 pt

hire an accountant

When it comes to a large amount of anything, it's always best to retain a professional.

[–] • 1 pt

Wholly agree there. I believe she will do that.

[–] • 0 pt

Thanks. That’s what we thought. Appreciate your answer.

[–] • 2 pts (edited )

Not a CPA. Most likely it would be long term capital gains capped at 15% federally. State long term may take out a few % as well. If she does not have reportable income, she can deduct out max 40k from the estate tax free federally. She might be able to move the house capital gains into something like a college fund account or trust fund not owned by her that could also reduce her tax liability.

I know, I know it sucks when the government waters down its currency, that ends up with everyone paying more taxes on their stuff going up in "currency value". I don't think anyone benefits from "free stimulus" but that's how they get you and the IRS is definitely looking out for this kind of stuff.

[–] • 1 pt

Instead of selling it she should put a cat farm on it. You know like raise cats. Sell Them to our future overlords the chi-knee. They love eating cats so you’ll never have too many. Guaranteed revenue stream There

[–] • 0 pt

Gotta upvote this, genius comes out of nowhere.

[–] • 1 pt

Property not updated or developed may have some tax advantages. Depends.

[–] • 1 pt

No CPA here, my understanding is it's 15%.

[–] • 1 pt

That’s what we thought but are just wanting to make sure.

[–] • 1 pt

It's probably 15%, but some of it could be taxed at 20%. I don't want to assume your mother in law's income, or her gains on the property.

The good news is that her cost basis on the property would include taxes she's paid over the years, and she can deduct realtor and transfer taxes from the sale. The actual taxable amount might not too bad.

[–] • 1 pt

There’s a lot of info in that last paragraph that we had no idea!! Thank you.

[–] • 0 pt

Definitely check with a tax accountant.

[–] • 0 pt (edited )

Fuck the feds. They have delegitimized their power and violated the constitution. Do not comply. Tax revolt. Sell for cash, fuck them. If you pay taxes you are funding your own oppression and the oppression of your children.

[–] • 0 pt

Not going to disagree but it’s not my property or taxes. She won’t try to fuck the Feds

[–] • 0 pt (edited )

Start a 501 (c)

donate the property to the 501 and enjoy the tax break

have the 501 sell the property (tax free)

use the money from the sale to pay yourself a small amount of income over a few years so the income tax is low

watch as the money grubbing jews start crying

[–] • 0 pt (edited )

I know in one case where they refinanced several times (pulling out value each time), capitol gains were close to 50% wiping out all the money after paying off the loan. Or at least that's what they said.

[–] • 0 pt

Thankfully she’s just going to sell. She’s never used the property for collateral. It’s never been refinanced since she inherited it and there was never any kind of lien on it.

[–] • 0 pt

Make sure that whoever she sells it to puts as many homes as possible on it. And make sure they look just like worker pods. Make sure that everyone that's going there is from California or the Colorado front range or from New York. Westchester county preferably.

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