Ilyce Glink and Samuel J. Tamkin
Q: My great-grandfather was a farmer and had about 23 acres when he died. My grandfather passed away before my great-grandfather. The land was put in a trust for my mother and uncles. My mother passed away two years ago.
The land has now been sold, and I’m supposed to get a third of the proceeds per her will. What do I have to pay in taxes on the money? I know there are capital gains on the property, but how does that work? Do we use the value from when my great-grandfather passed as a base?
A: Thanks for your question. We have good news for you. When your great-grandfather died, his land passed down to your mother and your uncles. For simplicity’s sake, we’ll assume that your great-grandfather’s estate was under the federal estate tax limits when he died, and his estate did not have to pay any federal estate taxes at that time.
Then your mother and uncles became owners of the land. Here’s where it gets…