1) Do I owe taxes to New York City and / or New York State from the proceeds and filing those taxes for this situation? Yes you do to both. There may be taxes withheld at the time of the sale which is usual.
2) I assume I owe taxes to the state of Georgia since it is considered income. The question is how much as the property was in our possession from 2007 until this year. Yes again but you will get credit for the NY taxes paid ... complete the non resident NY return first in the TT system for this to work properly.
3) Regarding the IRS, I read about a 'Stepped-Up' tax situation where I would be taxed on the difference between the value of the home at the time of our mother's passing (in the process of getting property assessment docs from 2007 showing the value of the home) and the selling price divided by the number of siblings. Is "stepped-up" taxation also available for the state taxes (possibly NYC taxes as well) and will TurboTax be able to work this out? Yes, the basis should be stepped up to the fair market value as of the DOD.
4) I also donated 10% of my proceeds from this transaction as tithes to a church. Immaterial to the reporting of the sale. If you itemize deductions then the charitable deduction may be used.
I have been using TurboTax for years and it is an easy filing. However, with this pretty remarkable change in income increase this year, I am not sure if there is a TurboTax version that can handle this or if I need a tax preparer or CPA familiar with real estate sales such as this one. The TT program can handle all of this if you want to do it yourself ... you can use any of the downloaded versions but if you use the online program you will need use the Premier or better.
