Tax Implications of Selling a Probate Property - Kevin Day Real Estate

Hello, I am Paloma and the topic of this short video is "Tax Implications of Selling a Probate Property." It's one of a series of probate videos produced by Kevin Day with Central Metro Realty, a realtor who specializes in the sales and marketing of residential real estate while in the probate process.
As you navigate the process of selling a probate property, it's important to understand the tax implications involved. Being aware of these can help you make informed decisions and avoid potential issues down the line.
Some key tax considerations when selling a probate property are:
Capital gains tax. Capital gains tax is applied to the profit made from the sale of an asset. For probate properties, the tax is usually based on the difference between the sale price and the property's fair market value at the date of the decedent's death. This "step-up" in basis can significantly reduce the taxable gain, which often benefits the heirs.
Estate tax. The estate tax is a federal tax on the transfer of the estate of a deceased person. Most estates do not owe federal estate tax because the threshold is quite high (over $12 million as of 2023). However, state estate taxes may apply depending on local laws.
Inheritance tax. Inheritance tax is a state tax that beneficiaries may need to pay on the property they inherit. This tax varies by state and is separate from the estate tax. Consulting a tax advisor can help clarify your state's specific laws.
Income tax on estate income. Any income generated by the estate during the probate process (like rental income from a property) may be subject to income tax. Ensure any income earned by the estate is properly reported and taxed.
Deductible expenses. Certain expenses incurred during the sale of the probate property, such as repairs, legal fees, and realtor commissions, may be deductible. Keeping detailed records of all expenses can help reduce the taxable gain.
Navigating the tax implications can be complex, Kevin Day, with Central Metro Realty can help by providing guidance and offering general insights on tax considerations and connect you with trusted tax advisors.
He can assist with coordinating with professionals working alongside your probate attorney and tax advisor to ensure all tax obligations are met.
Also, organizing and keeping track of all necessary documentation and expenses related to the property sale.
If you have any questions or need further assistance, feel free to call, text or email Kevin Day with Central Metro Realty, he's available to help you navigate the probate property selling process and achieve the best possible outcome.
If you are outside of the DFW metroplex Kevin has a network of probate specialist in all 50 states, and around the world. He can refer you to one that works in the area of where your property in probate is located.
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