As your father while alive gifted the property to you, his cost basis became your cost basis at the date of transfer and there is no step-up at his death. His cost basis was the price paid to acquire the property plus any allowable basis adjustments such as qualified improvements. Did he rent/take tax depreciation for the property?
You will owe Federal income taxes at long-term capital gain rates of 0%-20% (not ordinary tax rates of 22%-34%) + potentially 3.8% NIIT + potentially state taxes on the selling price in excess of your cost basis and not on the full sale proceeds. The original price paid for the property is usually documented in the property records often available online as well as documented in the purchase documents you may have from your father.
Open a taxable brokerage account to deposit the sale proceeds. Fidelity is a good option. You can temporarily hold the $ in a high-yield money market fund (MMF) which are yielding close to 5% currently. For best feedback on how to invest these funds, post your portfolio using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions
Keep the $ needed to pay taxes in the MMF. You may need to make Federal/state estimated tax payments for the quarter in which the sale closes.
You will owe Federal income taxes at long-term capital gain rates of 0%-20% (not ordinary tax rates of 22%-34%) + potentially 3.8% NIIT + potentially state taxes on the selling price in excess of your cost basis and not on the full sale proceeds. The original price paid for the property is usually documented in the property records often available online as well as documented in the purchase documents you may have from your father.
Open a taxable brokerage account to deposit the sale proceeds. Fidelity is a good option. You can temporarily hold the $ in a high-yield money market fund (MMF) which are yielding close to 5% currently. For best feedback on how to invest these funds, post your portfolio using the “Asking Portfolio Questions” template found here:
https://www.bogleheads.org/wiki/Asking_ ... _questions
Keep the $ needed to pay taxes in the MMF. You may need to make Federal/state estimated tax payments for the quarter in which the sale closes.
Statistics: Posted by HomeStretch — Sun Aug 11, 2024 5:06 am