Inheriting property? Lucky you! But read this first
If you’ve ever fantasized about a dear old aunt dying and leaving you her gorgeous classic six, well, shame on you! But you’re probably not alone. According to the Huffington Post, however, inheriting property is never as straightforward as someone simply handing over the keys—especially in New York City. Here are some of the surprises that await you:
• Mortgage transfers: The good news is you may be able to keep the mortgage on the place intact. Under federal law, banks can't "call" a mortgage if the recipient of the property is a relative of the deceased or a joint tenant on the apartment.
• Homeowner's insurance: Nope, the policy of the deceased doesn’t roll over and become yours. That said, the standard policy does extend insurance benefits initially and for an interim period, but make sure to read the fine print carefully to ensure you're covered.
• Estate tax: It all comes down to when the relative passed away and how much their property is worth. If the death occurred before March 31, 2015 and the property is valued under $2,062,500, you’re exempt from paying estate tax. Hooray! If the place is valued between $2,062,500 and $5,340,000, it’s subject to state taxes of 5.6 to 16 percent in New York, but exempt from federal taxes. And if it's valued at more than that, you'll face both New York and federal taxes of 40 percent for the amount that's over $5,340,000. Suffice to say, you need to read the estate tax law carefully to figure out what you owe.
Thanks to The Real Deal for spotting the story.
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