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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > PA inheritance tax return
Expert: Helen P. O`Planick, EA
Date: 9/12/2008
Subject: PA inheritance tax return
Question
Good Evening,
I inherited my father's house when he died. I was told by the CPA who has done my father's past taxes, that I cannot deduct all of the expenses I have incurred on the home since
then. $32,000.00 for a sinking foundation, mold remediation in the basement, RE taxes, bare bone utilities, etc. that I have been paying since his death. He said I can only deduct the 3 month's expenses right after his death. He stated that because I plan to rent it to my son and not sell it, these expenses are not deductible.
First off, how could I possibly put it up for sale like that? It's not safe according to a structural engineer who inspected it. The house is vacant, and my son is doing heavy renovations. DO I have to pay 4.5% tax on a house appraised at $205,000.00 before the mold and foundation problems came to light? Any help you offer will be greatly appreciated.
Thank you!
Answer
The expenses you incurred are added to your basis. The RE taxes are yours if you own the home now. The utilities, etc are not deductible by anyone.
Do you have to pay the PA tax? Yes. But I would get other appraisals to perhaps reduce the taxable portion.
Helen, EA in York PA
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