Client's relative dies in 2006. Leaves real estate (home) to 3 heirs. Probate action is opened to establish an Estate. Real estate is sold($100,000) in 2006, attorney files appropriate paper-work with Probate court. The Estate is now closed. Is there a tax liability on the income from the Estate proceeds for the heirs?
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It appears the answer depends on the FMV of the real estate on the DOD of the owner. Gain (if any) would be measured by the difference between the SP of $100K and the FMV. Assuming the proceeds were passed to the heirs, they would recognize any gain passed to them via a K-1 form on their individual income tax returns.Originally posted by Sherill View Post
Based on the title of your post, I'm not sure I've addressed your question but NY would require the gain to be recognized by both residents or non-residents. -
Withholding
NY also requires withholding on the sale of real estate. This is to assure the owner files a NY state tax return before he can get his money back.
(And, of course, keeps gobs of money continually in the NY treasury at all times which isn't really theirs).Comment
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Rocket
To clarify your post - NY only requires non-residents to have estimated tax payments withheld on the sale of real property in NY. Form IT-2663 is used when the deed is changed and if the taxpayer certifies there is no gain or ยง121 is applicable, they are not required to pay any tax. Tax (when applicable) is calculated as a % of only the gain.Comment
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NYEA Thanks
Thanks for the clarity - you live there....you should know.
A couple of guys in my town have sold NY property and had taxes withheld -
one from Mt. Morris (Rochester) and another from Long Island somewhere.
Their stories were almost identical...but of course, they were non-residents
by the time they sold.
Thanks for the correction...Comment
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