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Money and Finances
Reply to "Chapter 7 and tax refunds"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]If the heirs inherit the property there should not be any tax issues because the value of the property will be stepped up to the value at the date of death.[/quote] I'm sorry, I don't understand what "stepped up" means. [/quote] http://en.m.wikipedia.org/wiki/Stepped-up_basis Let's say parents bought a house in 1970 for $50,000 that is now worth $750,000, then they die and leave it to their son. The son doesn't want to live there and instead fixes it up a bit and sells it for $775,000. For IRS and state tax purposes the value of the inheritance for the son is $750,000 and he does not have to pay taxes on a profit of $725K, but instead his profit is defined as $25K. I know a professional can explain this better but that is the general gist.[/quote]
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