Anonymous wrote:Parents lived in home for over 40 years.
Does the son/daughter have to pay (the state of Virginia) taxes on the sale of the home?
The only reason the house is being sold is because the parents have both passed away. 2016 and 2021.
Had the parents sold the home while they were alive it is my understanding they would have been excluded from paying taxes on the sale due to their age and the amount of time they lived in the home.

No, this is not correct. They might have avoided county taxes because they were seniors (not sure about Virginia on this), but as someone above says, they would have had to pay huge capital gains taxes. By inheriting, you get a stepped up basis, which makes a huge difference in taxes.

I know this because my spouse and I ended up paying a lot of taxes because of a complicated situation in which inherited assets were not stepped up. You don’t want to deal with that if you don’t have to.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Getting any money from the sale of a parents' home is a gift. Do not get greedy and think ill of your parents for not selling while they are alive so that you would get more free money.

This post doesn’t make any sense. An home is worth more, inheritance-wise, if they don’t sell.

If your parents purchased a home that is now worth $3M for $250K, and they sell it, they will have to pay a 15% or 20% capital gains tax on $3M - ($250K + $500K) = $2.25M, or up to $450K in taxes. If they don’t sell and you inherit the property, you’ll be able to sell and pocket the whole $3M without paying a dime in federal tax.

Seniors in Virginia should not have pay a dime in taxes if it was their primary residence for several decades.

Seniors and people with disabilities do get some relief from property taxes but AFAIK not on transfer taxes when they sell or income taxes on the profit after the sale.

Anonymous wrote:

Anonymous wrote:Getting any money from the sale of a parents' home is a gift. Do not get greedy and think ill of your parents for not selling while they are alive so that you would get more free money.

This post doesn’t make any sense. An home is worth more, inheritance-wise, if they don’t sell.

If your parents purchased a home that is now worth $3M for $250K, and they sell it, they will have to pay a 15% or 20% capital gains tax on $3M - ($250K + $500K) = $2.25M, or up to $450K in taxes. If they don’t sell and you inherit the property, you’ll be able to sell and pocket the whole $3M without paying a dime in federal tax.

Seniors in Virginia should not have pay a dime in taxes if it was their primary residence for several decades.

Anonymous wrote:Getting any money from the sale of a parents' home is a gift. Do not get greedy and think ill of your parents for not selling while they are alive so that you would get more free money.

This post doesn’t make any sense. An home is worth more, inheritance-wise, if they don’t sell.

If your parents purchased a home that is now worth $3M for $250K, and they sell it, they will have to pay a 15% or 20% capital gains tax on $3M - ($250K + $500K) = $2.25M, or up to $450K in taxes. If they don’t sell and you inherit the property, you’ll be able to sell and pocket the whole $3M without paying a dime in federal tax.

Anonymous wrote:

Anonymous wrote:So since the parents did not sell when they were alive their children have to pay taxes on the sale because they have not reached senior citizen age yet?

People have to pay taxes when they sell homes. Even senior citizens. Even heirs. Even people who have lived in a home for a long time.

Are you sure about Virginia?

Anonymous wrote:So since the parents did not sell when they were alive their children have to pay taxes on the sale because they have not reached senior citizen age yet?

People have to pay taxes when they sell homes. Even senior citizens. Even heirs. Even people who have lived in a home for a long time.

So since the parents did not sell when they were alive their children have to pay taxes on the sale because they have not reached senior citizen age yet?

Step up in basis is worth a lot more to you than whatever piddly amount you might owe in state taxes.

But yes, generally state taxes are owed to the state in which the house is located (even if you’re residents of another state). Same goes if you decided to rent the house for income as out-of-state landlords: you would pay state taxes on the rental income.

Getting any money from the sale of a parents' home is a gift. Do not get greedy and think ill of your parents for not selling while they are alive so that you would get more free money.

Virginia doesn't have estate tax so if the sale is part of estate- you might not have a huge tax bill but like everything else- it depends.

Stepped up basis to date of death. Capital gains should be minimal. Assuming nothing unusual in the titling of the home.

Anonymous wrote:Parents lived in home for over 40 years.
Does the son/daughter have to pay (the state of Virginia) taxes on the sale of the home?
The only reason the house is being sold is because the parents have both passed away. 2016 and 2021.
Had the parents sold the home while they were alive it is my understanding they would have been excluded from paying taxes on the sale due to their age and the amount of time they lived in the home.

You’ll get a step up in basis federally, so no tax if you sell right away. I can’t speak to Virginia.

Parents lived in home for over 40 years.
Does the son/daughter have to pay (the state of Virginia) taxes on the sale of the home?
The only reason the house is being sold is because the parents have both passed away. 2016 and 2021.
Had the parents sold the home while they were alive it is my understanding they would have been excluded from paying taxes on the sale due to their age and the amount of time they lived in the home.