Tax Law (Questions About Taxes)/inheritance

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Question
My wife was left a home via will by her aunt, my question is how does this get reported to IRS. Also, there is a HE loan associated with the home of over $33,000. My wife would like to keep the home and rent it. Please advise.
Thanks,
Ennis

Answer
Depends. Generally inheritance is tax free and not reported anywhere by recipient (major exception is pension income)

Did the will say she inherits home _with_ the loan.

Normally. Will says pay all debts.

Then make distributions.

If this is the case As it likely is.. the loan should be paid off with _other_ assets from estate (especially important if there are other assets to pay off the loan first!

She can keep house and rent it.  Value for depreciation is fmv on date of inherotance.  Best to get appraisal to document value. If not done for estate purposes.


I'd be happy to help if you need.

P

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