Aug 31 2016

Don’t Forget to Include Tax Consequences With Assets

Published by at 3:48 pm under Finance & Loans,Investment

Be aware of all the financial implications that are in place when it comes to passing down assets to your heirs.

inheritance-tax-consequencesIf you prefer not to sell your home prior to retirement, you can also go with the route of considering whether or not you want to leave it to your heir. There are numerous assets such as: stocks, bonds, mutual funds, and annuities that are available. However, remember that there are going to be tax consequences that you should plan out before you make the decision so you don’t end up paying a significant amount. Weigh your options, or even speak to a financial advisor so you can get on the right track.

Tax Exemptions

If your property is essentially below the federal estate gift and estate tax exemption – which is typically $5.45 million for 2016 – you can avoid capital gains tax on the appreciation. So, for example, if you bought a house for $200,000, and the value has made it go up to $550,000, your heirs’ tax basis on the house will typically be the difference between the value on the that you die as well as the sales price.

Check For Depreciated Security.

An example of something that you shouldn’t do when it comes to assets is to pass down depreciated securities on to your children or heirs. If you purchased a stock for $50,000 and it depreciates to $30,000, there’s basically a $20,000 capital loss deduction. Once you die holding onto that loss, it is no longer an option. But, remember that tax consequences do vary, so it’s important that you consult with a financial planner in order to proceed in a financially smart manner.


Kuba Jewgieniew is the head of Realty ONE Group, a real estate brokerage firm with offices in California, Nevada, and Arizona.

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