Sold my mom's property three years after her death, due to developer's requirement to process all zoning changes, etc. Capital gains are $2 million. If the estate pays, I believe the rate is about 35 percent. If we split the property (four heirs), each heir would be responsible for $0.5 million of the capital gains. Yes, K-1 forms required. Two CPA's gave different advice. One said that each heir would count that $0.5 million as personal capital gains, and hopefully be taxed at a lower individual rate than the estate rate. The other one said that each heir would still need to pay about 35 percent, as that was the estate rate. Each heir could save significant savings if the estate capital gains were taxed at personal rates. Which CPA is right?
