It may have been easy, but it is far from the best way! With respect to capital gains tax liability, when your mom gifted you her property, she unfortunately also gifted you her tax basis. This means, for example, that if your mom paid $50,000 for the property – and let’s say it’s worth $1M now – if you ever want to sell the property, you’ll have to pay capital gains taxes on the difference between the sales price and the purchase price. However, if you want to ERASE all of that appreciation and tax liability, you should talk to an attorney about the best way for you to INHERIT the property in order to take advantage of what’s known as the “stepped-up tax basis”. For capital gains tax purposes, it is always better to receive by way of inheritance and NOT by way of gift! If you or anyone else you know has a heavily appreciated piece of real estate and want to discuss this more, please feel free to reach out to us (707-681-5851 or [email protected]) or set up a complimentary consultation at your convenience by clicking on the following link: https://MyNapaLawyer.as.me/.
