HELP! Inheritance money issues?

Question

I just received my portion from a family trust . We sold some property that belonged to members of my moms family and then our family trust dispersed the checks. My share was <$300,000 Now what?

My questions are

1) How do I figure Capitol gains Tax and go about paying it?

2) Do I pay now or at the end of the year?

3) Do I pay a sales tax in my state? Its WA. and again, how do I find how much and how/when to pay?

Everything I look at under tax advisor's via web search doesn't seem to point me in the right direction. I don't want a financial planner and already have a guy who handles my stock investments. Do I need to hire someone for this and who do I look for to get the help and answers?

Thanks

Answer 1

1. it depends on you tax bracket

2. at the end of the year

3. no it was paid when the property sold

you need a simple tax accountant look it up in the yellow pages. You best bet is a tax accountant that also is a &quot;Certified Financial Planner&quot; they can steer you in the right direction to avoid as much tax as possible.

Answer 2

capital gains is figured by finding the &quot;value&quot; at the time of mom&#039;s death.  Usually there is an inheritance tax return completed or some type of inventory, that has current values listed.  Sounds like the trust sold the property and then proceeds distributed to you, so there wouldn&#039;t be any capital gains tax that I can see.

Answer 3

Well I&#039;ll help you with it....

Beware the guys that lead with that line.  :)

I&#039;d suggest finding a CPA immediately.  They&#039;ll be able to calculate how much you&#039;ll have to pay in taxes, whenn , etc.

I&#039;d also suggest that you open a dba (type of corporate structure) for a small business to funnel the money, and most importantly, the TAXES through.  This will allow you some control over what you have as deductions.

Furthermore, I&#039;d suggest that you set aside the money that you&#039;ll need to pay for the taxes until you truly have to.  Instead take that money and put it in some form of interest building account.  The thought behind this being:

Tax on this money is $100k (ish)

In 180 day CD at 4.5% apr, you&#039;ll make a little over 2k

They&#039;ll tax the 2k as well, though

But, if they take $500 of the $2000, you&#039;re still $1500 ahead!

This is an example of making your tax dollars work for you!

While yes, that&#039;s a low return for an investment, it&#039;s the money that you&#039;d usually spend on your taxes so you want to be careful with it.

While you have my condolences on your loss, I do hope you use your windfall to make your future a more secure financial future for yourself.

Answer 4

Ask the trustee what your 1041 schedule k-1 will look like.

The trust had a basis in the property.  (Depending on the type of trust, the value may be the original purchase price.)  Thus if it appreciated in value, you may have a huge capital gain and may need to make estimated tax payments.