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Federal clearly isn’t an issue (11m exemption per person). Can’t speak to NYS related issues.
If they were afraid of the federal estate tax changing they could gift it before.
If they are really worried call up an NY CPA who deals with it and pay em for an hour to talk through it.
NYS exemption is much lower, around 3M but you shouldn't have any issues with any inheritance tax unless they are leaving you a lot of cash and other assets.
If by inheritance you mean when they pass away, under current law it depends on their amount of lifetime gifts and amount of assets that will be transferred at their death whether they will be subject to estate tax or not. They should hire someone with estate planning expertise if they anticipate they will be subject to that. If you’re talking about your gain when you inherit and sell the property, you get the step up in basis to FMV at their date of death, so it is less of an issue.
If they gift when alive you will get carryover basis, if you get it when they die you will get a step up to FMV (at least until Biden changers the law).
Thank you all for this feedback. Good to know about the bump up in basis. I was wondering about setting up family trusts for tax shield purposes Any thoughts?
In your parents’ will, they should leave you the property in trust rather than outright. You (or the trust) still get the step up in basis. But there are other huge advantages in that it will be shielded from creditors and ex spouses and the property value won’t be included in your estate.