• Property Tax: Heirs may have to pay property taxes as soon as they inherit real estate and will pay them for as long as they own the house. Many states cap how much the assessed property value can rise from year to year, but when someone buys or inherits real estate in California, it will normally be reassessed at current market value. Even if subsequent assessments are capped, the initial reassessment can result in heirs paying thousands of dollars more in taxes than the previous owner. Some states offer an exemption; California state law, for instance, says that if the heir is the child of the deceased owner, they can request an exemption from full reassessment. However, there are important restrictions to be aware of. This exemption requires the sole heir (or all heirs) to physically move into the home and live there as their primary residence. *If the home's current market value is more than a million dollars above the existing assessed value, then the excess will absolutely be subject to immediate reassessment. *If there is more than one heir, a full exemption is only granted if ALL heirs reside in the premises... OR otherwise, the exemption calculation will be prorated proportionally - based to the percentage of the estate the occupant(s) are inheriting. *There is NO exemption possible on any rental properties or commercial real estate. This will certainly upend the existing cash flow.
• Capital Gains Tax: Capital Gains taxes are applicable
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