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My mother and my sister co-own an apartment. My sister wants to gift all of her interest to my mother. On my mother's will, I am sole beneficiary.

After my mother's passing, what is my capital tax liability when I sell the apartment after inherit the apartment?

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    where do you live? Who's capital gains tax applies? May 6, 2020 at 0:23
  • Live in California.When it comes to gifting, not sure who will be liable for capital gain tax. I was told that a person who is giving is free and clear of any capital gain tax. The recipient will be liable for any capital gain tax.
    – Won Yoo
    May 6, 2020 at 0:30
  • And how long have you co-owned the property, that can have a bearing in some situations.
    – Marcus D
    May 6, 2020 at 8:09

1 Answer 1

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After someone dies, the property may receive a step up in basis. If this is the case, the capital gains tax would be based on the difference between the value at the time of death and the sale price.

This is not tax advice and the rules could change between now and then, so be sure to talk to a tax professional.

https://www.investopedia.com/terms/s/stepupinbasis.asp

EDIT: Your sister should also speak to a tax professional before making the gift. She may need to file a gift tax return.

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