Legal Question in Tax Law in Georgia

Re: Taxes on Inherited Estate Sold

Whether you will owe any tax depends on three things:

1. Did your grandmother have an estate of more than $1.5 million? If so, an estate tax may be owed, but the primary responsibility is on her executor or administrator.

2. Did the property appreciate in value between the date of her death and the date of sale? If her death was relatively recent, you probably have no " profit" in the tax sense. If it was not recent, you will owe capital gains tax on the difference between the value of her share when she died and the sale price. The executor should provide you wiht the date of death value.

3. Did the executor receive any interest on the sale proceeds before he handed them over? If so, you owe income tax on the amount of interest distributed to you. Again, the executor should provide you with this figure.

Note--if you are a "residuary legatee", that is, someone who receives a certain fraction of the entire estate, you will may have received that same share of the entire amount of income received by the estate in the year of distribution. You should consult a lawyer to see if this is the case (he will be able to interpret the will). Again, the executor should provide you with the numbers.