Inheritance tax

[Lowake Hunter]

For the record my grandpa owns about 1200 acres and this is what im referring to in this post. So make a long story short my grandpa has a written will and its given 50/50 to my aunt and dad. Now the question I have is my dad and aunt will have to pay inheritance tax on the land and everything else their inheriting correct if all he as in place is a written will?

Well grandpa met with his lawyer and said only if its greater than 5 million, well I have heard you still will have an inheritance tax rate just not the max 40% even if it what you inherent isn't over 5 million . Anybody know how exactly this goes down with the inheritance tax?

Thanks guys just trying to make sure this lawyer he's dealing with isn't pulling a fast one. I've tried getting him to deed it over, make a trust etc. But without getting into details it isn't going to happen just making sure we are going to be able to keep all the land in the family one day or at least try our best to do so.

[BrandonH]

The attorney is correct. I've recently helped my Grandmother set everything up with an attorney and have been told the exact same thing. What is the market value of the property?

[Ag 96]

You need to go see an estate planning attorney.

That being said, the attorney is right. You don't have inheritance tax on anything under $5 million. However, that $5 million exemption amount is based on fair market value of ALL the assets of the estate on the date of death. With today's volatile land prices, you could be pushing that level real quick in some areas with 1200 acres especially if minerals or O&G production is involved.

I would highly recommend that you go see an estate planning attorney, preferably a board-certified one.

[1369]

If I'm not mistaken, there shouldn't be any kind of penalty on the land until it's sold.

[Shane]

The estate tax exclusion in 2016 is $5,450,000.

[Atfulldraw]

there is really no way to answer your question here.....

it will depend a lot on the value of the land.

the taxable estate limit (5.45 million in 2016) is subject to additions based on the value of lifetime gifts, mortgage deductions, charitable deductions, etc. and a host of other questions that only an attorney should be delving into.

the rest of us would just be guessing.

[Lowake Hunter]

Not more than 5 million and no oil or gas. Thanks guys appreciate the help.

[Skinny]

Have your grandpa sell the land to them for real cheap!!! [emoji1474]

[RWB]

need to see an estate planner.....from what I gather deeding it over is a mistake that a lot of people make in that the cost basis is transferred as well. So your dad and aunt would have to pay taxes if they ever sold it on profit of sell price minus what grandpa paid for it versus If they inherit it their cost basis is market value at the time the land passes to them during probate. By trying to avoid taxes that you don't have today you create a huge issue for tomorrow.

[hornet527]

The estate tax exclusion in 2016 is $5,450,000.

This--- ur in the clear , not tax problems

[clay4626]

Have him deed the land to them now. Give each one half and then no taxes.
My parents had a lot less land but deeded it to us several years before they passed away.
Just go to a title office and have them deed each part to the children. Then no probate on the land.

[Grayson]

This--- ur in the clear , not tax problems

It's impossible to arrive at this conclusion based upon the limited facts presented.

[Grayson]

Have him deed the land to them now. Give each one half and then no taxes.
My parents had a lot less land but deeded it to us several years before they passed away.
Just go to a title office and have them deed each part to the children. Then no probate on the land.

This possible solution still requires an estate/tax analysis and should simply be one of many avenues considered during a meeting with a qualified estate planner. In my opinion, lawyer, CPA, and financial advisor should all be in on this discussion.

[2B4Him]

Any tax that would be due based on the size of the estate is paid by the estate before any assets are distributed under the will. The recipients receive their inheritance 'free and clear'.
Probate is not something to try to avoid in Texas - painless. Especially if the parties are all in agreement.
And if reaching the $5.4M isn't going to be a problem, the step up in basis at Grandpa's death will be good for the beneficiaries.

[clay4626]

Its very easy to do. Just have him go to title office and tell them to deed half to each one.
The only issue is to make sure each one knows where their half is. There is a lot of land tied up because people cant agree which part is theirs. The only way to sell it is both agree to sell and split money. If you can't get all parties to agree then you are stuck.