Who gets what from sale of house deeded to one sibling

Reply Thu 17 Apr, 2014 11:14 pm
My mother deeded her home to one sibling to have an advantage should she need nursing care. She made it clear in her will that the home sale on her death would be shared by the three siblings and the grandson of the daughter the house was deeded to. She wrote a letter to us outlining her plan and intentions and that all of us "owned " the house on her death. Sadly, she deeded the house after the will was written and now the house has sold. The sister who " owned " the house now is in possession of the proceeds and is not sure how to distribute them without tax consequences to her as we each will get about $100,000.

Any help with this mess?
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Peter Frouman
Reply Fri 18 Apr, 2014 12:02 am
You should get professional advice from an accountant and/or an attorney to get a definitive answer.

Assuming you are in the U.S., if the value of your mother's estate did not exceed the estate tax exemption (5.34 million for 2014 and 5.25 million for 2013), it's unlikely there would be any tax consequences for your sister. Despite your mother's intentions, since your sister got the deed to the house before her mother's death it seems like she may actually be under no legal obligation to distribute the proceeds of the sale to anyone else but if she did, there would also be no tax consequences unless the value of her estate exceeds the federal estate tax exemption (which could change). However, there may also be state tax laws and other issues that need to be considered so you all should really get professional advice from an accountant and/or lawyer with expertise in tax issues and estate planning.
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