Metro® Boston, Publication Date: March 9, 2011
By Attorney George Warshaw
What would you do?
An elderly parent owns several rental properties. He offers to sell these investments and give you your inheritance now. You could, of course, decline and simply inherit it several years from now.
Most people, I suspect, would take the cash now – but they might be short changing themselves. Here’s why.
Let’s say your parent sells an investment property and has to pay a capital gains tax of $100,000 on the profits realized. If you were to inherit the property instead, you might have saved the $100,000.
When a person inherits real estate, he or she acquires it at its fair market value. Sell it at the same value and you haven’t made a profit in the eyes of the IRS. For example, if a property is worth a million when you inherit it and then you sell it at the same amount, you haven’t made a profit. You make a profit only if you sell it for more.
Be careful though: if your parent’s estate is large enough to be subject to a federal or state estate tax, it might be better to take the money today. Consult a tax accountant or attorney for your situation. © 2011 George Warshaw.
The foregoing is not intended as legal advice. Consult an attorney to see how or if the foregoing applies to you.
Attorney George Warshaw represents buyers and sellers of homes, condos and investment properties, prepares wills and trusts for inheriting real estate, and trusts that protect your children and pets. George welcomes new clients and questions at george.warshaw@warshawlaw.com.
If you missed my column in the Wednesday Boston®Metro newspaper you can read it here! And contact me if you need help in buying or selling your home or in planning your will. - George
George in the Metro 
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