Inheritnance tax

Asked by Cuticuti, San Ramon, CA Thu Dec 27, 2007

If i have a house in SJ bought for $600K but now it's worth at least 1.15 Million. Should I sell now to have $500K free tax or should I keep it as renting and leave the house for my kids?

For inheritance tax, how much will my kids have to pay? How much is the max that they can have without paying? What happens if I have another rental house and it's worth 100K more in increasing. Can it also be free inheritance tax?

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David Blockh…, Agent, Los Altos, CA
Tue Jan 8, 2008

Talk to a CPA. One question the CPA will ask is how long has it been a rental. to determine the best use of the asset. Two thoughts: time value of money of the cash if you sold immediately - taking 500K today and wisely investing it (diversifying into other investment vehicles) is likely to create a larger asset than what your kids might get 20 years down the line when holding the house. (2) Could sell it as an investment (doing a 1031 exchange) and exchange the 500K investment into a fourplex or other like kind real estate investment... keep doing 1031 exchanges to build ywealth for your estate. If done wisely, you can give your children much more in total value than just the value of your current home.
1 vote
Realtor, ,
Sat Dec 29, 2007
Hello Cuticuti, Feel free to visit my website at . I have a link on my site to a great legal estate planner in the area who would give some great legal advice and answer your question.
1 vote
The Hagley G…, Agent, Pleasanton, CA
Sat Dec 29, 2007
An attorney can advise you on how to best handle this situation. It's a bit complicated, as you can see from the article in the link below. As a Realtor, I cannot advise you,however if you do some research through Google, you'll be able to see how complicated the answer to your question can be!
1 vote
Pam Winterba…, Agent, Danville, VA
Thu Dec 27, 2007
This is a great question. I believe you may want to direct it to your CPA and or tax attorney as we are unable to give that kind of advice. Good luck.
1 vote
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