Legal Question in Real Estate Law in California
Capital Gains
After many suggestions not to,parents sold deceased Grandparents property that was put in my mothers name 3yrs ago.Family owned for 60 yrs.Taxes were very low and protected under prop 13 even after transfer to Mom 3 years ago,since she was the daughter.Property sold for 1,200,000.00.How much gains will they have to pay on this?Both are over 60 with low income.Can they roll over a certain amount into other real estate to avoid paying capital gains.Is there a certain amount they can reinvest?If that is possible wouldn't it be wiser to reinvest rather than paying a large amount to tax man?Can they purchase real estate for family to avoid gains.Basically what can they do to avoid such a large penalty?Since they acquired it from family, do they still have to pay gains?Since it was put into Moms name 3 yrs ago, they did not live here, nor did they do any improvements.Other family members resided on property.Thanks for any help.
2 Answers from Attorneys
Re: Capital Gains
If the escrow has already closed, you are too late to be asking these questions. If it has not closed they should immediately take steps to make this a 1031 exchange, which will require them to reinvest all of the proceeds into like-kind property.
If the escrow has closed, the tax will be 15% of the gain for federal, and 9.3% for state (assuming the property is in California)
Re: Capital Gains
trust me, pay a good lawyer to review all, all of athe documentation and give you good legal, tax, advice --- you need a expert in real property tax transactions which i do but its very hard to unscrambel the egg, you needed one before anyone did something against their tax, death, childrens rights and advantages --- good luck
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