Legal Question in Tax Law in New York

Re: New York State Inheritance Tax

As long as your friend's estate is worth less than $1 million, it may very well be that paying an inheritance tax is not in your future. However, this can be changed by several things, such as your income (I know you said "paycheck to paycheck," but there are people whose paychecks are pretty big who live "paycheck to paycheck"), the basis value of the property, and other factors.

You will indeed have to "pay" for the houses, but not to purchase them if you inherit. Houses require maintenance, property taxes must be paid to the local taxing authority, you'll have to pay to keep insurance current, etc. etc. etc. Houses are indeed money pits, and their owners have a constant drain on their pocketbooks.

Houses, however, can be sold and the owner is then rid of the money drain. In your part of the world, that's probably a pretty penny for a house, and an even prettier one for two. Sale proceeds, however, can indeed be taxable to you. Check with your accountant or tax attorney to determine your best tax strategy for selling the property if that's what you intend to do with it.

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