Paul O. Dillon, Attorney at Law

Can Life Insurance Replace Gifting and Lower Estate Tax Thresholds?

The possibility of paying up to 40% in estate taxes has many people contacting their estate planning attorneys to figure out how to avoid losing much of their estate to taxes. According to a recent article titled “An Alternative to Gifting For Estate Planning Exemptions” from Financial Advisor, there are a number of strategies to use.

These include using Spousal Limited Access Trusts (SLATs) so couples can gift significant assets to each other and still have access to the assets during their lifetime. Another is by making gifts to heirs who would otherwise receive them after their family member passes. However, the choices aren’t always desirable.

Gifting large amounts like $14 million is a lot of money to gift during one’s lifetime. If the asset gifted is securities, capital gains taxes may need to be paid. Suppose a taxpayer makes a $10 million gift of securities in 2024. They have passed $3.5 million and saved $1.4 million in estate taxes. However, if the transferees’ income tax basis in the $10 million of gifted securities is $4 million, and if the combined net capital gains tax rate, plus net investment income tax and state income tax is on the $6 million in appreciation, the built-in capital gains tax on the gifted securities would be $1.4 million.

Every gift of securities or business interest carries a certain amount of capital gains tax liability to be considered. If the taxpayer holds the assets until they die, the heirs get a step-up in basis, which they won’t get with a gift.

It’s impossible to know whether or not these tax exemption thresholds will be extended, which is why many taxpayers are confused about what to do. If a large transfer is made, then the tax exemptions remain high. Has the taxpayer put themselves in an unworkable situation?

An alternative to consider is life insurance. If a couple can purchase life insurance, they can purchase a second-to-die life insurance policy owned inside an irrevocable life insurance trust. If the premium is covered under the “Crummey powers,” which allow the money to not count against the estate and gift tax exemption, the proceeds of the second-to-die life insurance policy will be income and estate tax-free.

Will the numbers work? To see if it is a good option, each couple or individual will need to do a careful analysis of the premium cost, the expected time they will pay policies and the impact of gifting.

While each circumstance is different, discuss this with your estate planning attorney. Giving up full access and control of assets may not be necessary to avoid the estate tax. Alternatives should be considered before making any significant estate planning moves.

Reference: Financial Advisor (July 24, 2024) “An Alternative to Gifting For Estate Planning Exemptions”

Will I Need to Pay Taxes on Inheritance?

It happens all too often: a couple has an estate plan created, including a last will, upon the birth of their first child. However, it’s never updated when a second child is born. Or a man neglects to update his named beneficiary on a retirement account after he and his first spouse divorce. Failing to update wills or beneficiary assignments results in problematic situations for heirs, according to the article “Inheritance Tax: What Happens When You Split What You Inherit With Someone Outside of the Will?” from Go Banking Rates.

When someone inherits money or other assets, they sometimes must pay taxes on it—if they live in one of only six states still having an inheritance tax. Those states are Iowa, Kentucky, Nebraska, New Jersey, Pennsylvania, and Maryland.

The taxes range from 0% to 16% on assets with a value greater than the state threshold. The rates also vary depending on the relationship between the decedent and their heir.

If you live in Nebraska, as of 2023, any immediate family members must pay a 1% tax on inherited assets if the estate is valued at more than $100,000. Heirs not immediate family members must pay 11% for assets valued over $40,000 and 15% for assets worth more than $25,000.

If you live in Pennsylvania and are a minor child under age 21 or a spouse, you don’t need to pay an inheritance tax. However, children of the decedent do have to pay one.

Inheritance tax is different than estate tax. The federal government doesn’t levy an inheritance tax but has an estate tax. Heirs pay the inheritance tax, while the deceased person's estate pays estate taxes.

To get a rough idea of the estate’s value, the executor adds up the fair market value of all assets the decedent owns, including property, cash, investments, cash and insurance. The executor must next add all liabilities: credit cards, mortgages, car loans, etc. Subtracting the total liabilities from the assets results in the value of the net estate. An estate planning attorney will be able to help determine an accurate value.

In 2024, the threshold for estate tax is $13,610,000, paid only by a few Americans.

Some states also have an estate tax. This includes Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. State estate taxes vary considerably, from as low as 0.8% to 20%. A local estate planning attorney will know your state’s estate tax and how to structure your estate plan to limit tax liabilities.

Inherited property is taxable if you sell it for more than it was worth when it was first inherited. Let’s say someone leaves you a valuable sailboat with a fair market value of $100,000 when you inherit it. If you don’t want it and sell it for $200,000, you have a capital gain of $100,000. You’ll likely owe capital gains tax on the difference.

If someone neglected to update their estate plan and a sibling was left out of the will, you can make them whole by sharing the estate. However, you’ll have to inherit the asset first and then determine how to distribute it. An estate planning attorney is the best resource to solve this problem.

Reference: Go Banking Rates (April 8, 2024) “Inheritance Tax: What Happens When You Split What You Inherit With Someone Outside of the Will?”

What Is the Primary Purpose of a Revocable Trust?

There are many basic tools of estate planning, which become more effective when they are coordinated and complement each other. For asset protection and tax planning, aligning strategies is critical for success, says a recent article from Kiplinger, “Revocable Trusts: The Most Common Trusts in Estate Planning.” The benefits of revocable trusts include letting the grantor—the person making the trust—have control of assets.

As the name implies, revocable trusts are more flexible than irrevocable trusts. The grantor of a revocable trust may change the terms of the trust whenever they wish, transfer property in and out of the trust, and change beneficiaries at will.

A revocable trust has many benefits. One benefit is that assets placed in a trust are not subject to probate when the estate is settled, keeping the terms of the trust and the nature of the assets private. A revocable trust allows for a step-up in basis, which can reduce or, in some cases, eliminate capital gains taxes.

The language of the trust provides instructions for managing and disposing of the assets upon the grantor’s death. A revocable trust can also be designed to protect assets for beneficiaries, set certain conditions for asset distribution, or require the funds to be used for specific costs, like education or home purchase.

There are some limitations to be aware of, which should be discussed with your estate planning attorney. If the goal is to protect assets for the grantor, an irrevocable trust is better. For example, if the grantor was involved in litigation and lost, a revocable trust’s assets could be recovered as part of the judgment. This is because the grantor still has control of the assets.

If the assets were in an irrevocable trust, the grantor would have no access to them, which adds a layer of protection.

The grantor needs to consider trading control of and access to assets for protection from court judgments and creditors.

You and your estate planning attorney should discuss which trust is better for your situation. A revocable trust is an excellent tool for estate planning, but an irrevocable trust provides more protection and can potentially shield assets from taxes.

Many people of modest means find that a revocable trust serves their interests well. In contrast, people with higher estate values find a combination of revocable and irrevocable trusts allows them to structure trusts to meet their goals.

Reference: Kiplinger (April 4, 2024) “Revocable Trusts: The Most Common Trusts in Estate Planning”

Why You Shouldn’t Leave Your Home to Your Children

For financial and sentimental reasons, many people want to leave their homes to their children.  However, there are many reasons making this a bad idea, says the article “Generational Wealth: 7 Reasons to NOT Leave the Family Home to Your Children” from yahoo! finance.

Homes are transferred to children in several ways. However, each has drawbacks, from tax liabilities to the risk of losing the family home entirely. Here are how homes are typically transferred:

• Trusts
• Gifts
• Inheritances
• Transfer on death deed
• Sales

A Probate Hold Up. If the home is left to the children in your will, it could get tangled up in the probate process. Probate could hold up the transfer of the home by months or even years. If the house is tied up in probate, who will take on the tasks of paying the mortgage, if there is one, maintaining the home and paying bills? Who will protect the house from vandalism, squatters, or thefts if it is vacant?

Capital Gains Taxes. If the house is left to the children and they decide to sell it, they may have to pay a capital gains tax if the home has appreciated since the owner’s death. If the home is gifted to the children before you die and they sell it at a future date, they’ll have to pay capital gains taxes based on the market value of the house when they received it and the sale price. Where will the money for these taxes come from?

More Taxes to Consider. If you place the home in a living trust and instruct it to be transferred to the children upon your death, you have not shielded it from estate taxes. If you do this to reduce assets to qualify for Medicaid, the living trust is still a countable asset in most states. Your estate planning attorney will know how this might impact your estate and your Medicaid accountability.

What if Your Children Lose the House? Gifting the home to your children, adding them to the deed while you are living, or even selling the home to them exposes the house to risk. The home may face foreclosure if any person on the deed has financial difficulties and can’t make the mortgage payments. If they go through a divorce, the house will be considered a marital asset. Your years of paying the mortgage and caring for the home will evaporate.

Do They Want the House? Parents who feel generous may assume their children want their home when they might not. They will see it as yet another piece of unfinished business left for them to manage when their own lives might be very busy with their own children and careers. If they grew up in the home and have fond memories of it, this will make selling it even harder.

Can They Afford the House? Not every child enjoys financial success. If they can’t afford a mortgage, property taxes, utility bills and the inevitable costs of home ownership, like replacing a roof, etc., home ownership may become a huge burden. If “forced” into possession via inheritance, they may have to sell it at a lower cost to get out from under the bills.

Will They Fight Over the House? Families experiencing grief are not in the best place to make big decisions and are vulnerable to spats that rise to legal disputes. If one child is living in the house and wants to keep it, will they be able to buy out the other’s shares of ownership? A discussion of what you all want to happen with the house and what is realistic needs to occur. This should be followed by a conversation with your estate planning attorney to have the plan made, whether it’s part of your will or another type of agreement.

Reference: yahoo! finance (Dec. 11, 2023) “Generational Wealth: 7 Reasons to NOT Leave the Family Home to Your Children”

Tax Strategies for Different Stages of Aging

Defining “late old age” must consider factors like health, mental status, family history and plain old luck, says a recent article from Financial Advisor, “Tax-Smart Wealth Transfer Tips For Clients In Late Old Age.” However, imagine this scenario: a person in late old age is often widowed and, if they are well-to-do, has more assets than they are likely to spend in their remaining years after accounting for reserves needed for long-term care.

At this stage, it’s important for the person to have an estate plan in place, with named beneficiaries on any retirement and investment accounts, and have taken steps to minimize taxes heirs will be liable for upon their death. If this planning has not been done yet, there’s still time—but there’s no time for delay.

Recent changes in the treatment of inherited retirement accounts and events like deaths, births, or marriages in the family mean every plan needs a close look at least annually. What else needs to be done?

• Directed, consistent, constant dollar levels of withdrawals from traditional individual retirement accounts (IRAs). This avoids being catapulted into a higher tax bracket. Charitable donations should be used, while enough IRA assets should be retained to take advantage of lower tax brackets coming in late old age.
• Topping off required minimum distributions (RMDs) with voluntary withdrawals to fund Roth conversions, starting when the individual was married, and the spouse was alive when couples enjoy more advantageous tax levels than singles.
• This is also the time to contribute to donor-advised funds (DAFs) or the family foundation by selling highly appreciated stocks. If one spouse’s death was anticipated, a share of appreciated stock held in joint accounts could be transferred to a separately owned account to gain the step-up at the spouse’s death.

After the work has been done and you enter late old age, there are three priorities to keep in mind:

• Be sure the beneficiaries in your IRA reflect your current preference and minimize the beneficiaries’ taxes from traditional IRAs.
• Confirm that the person named as your executor understands your investments and bequest preferences and is ready to take on the tasks to come in the future.
• In the case of imminent inheritance tax liability imposed by federal or state law, speak with your estate planning attorney about how a planned charitable gift or other means of minimizing estate taxes might be accomplished.

Can beneficiaries’ tax burdens be minimized? Consider these options:

• Switching IRA beneficiaries to grandchildren or younger family members in lower tax brackets, since non-spouse beneficiaries have only ten years to empty the accounts.
• Helping wealthy children who don’t need inheritances designate their children or others in the family’s next generation as beneficiaries of other non-IRA assets in the estate.
• Make a planned charitable gift to avoid federal and state inheritance taxes and capital gains taxes on appreciation the estate will owe before probate is completed.

An experienced estate planning attorney can handle legal filings after death. Nevertheless, the exact attorney needs to be part of the team, including a competent executor aware of your intentions and a financial advisor familiar with your assets and transaction history.

Reference: Financial Advisor (Oct. 3, 2023) “Tax-Smart Wealth Transfer Tips For Clients In Late Old Age”

How Do I Reduce Size of My Taxable Estate?

The current lifetime estate and gift tax exemption is set to be cut by half after 2025, unless Congress acts to extend it, which doesn’t seem likely in the current financial environment. There are steps to minimizing not only estate and gift taxes, but also income and capital gains taxes, as reported in a recent article “Smarter Ways To Make Estate Planning Gifts” from Forbes.

It’s generally better to give property than to give cash, especially investment property. Recipients are less likely to sell these gifts and spend the proceeds. It’s more likely that cash will be spent rather than invested for the long term. Investment property is almost always a better gift for the long term.

However, property gifts come with potential taxes. To minimize the after-tax wealth, make gifts of the correct properties. There are a few principals to follow.

Don’t give investment property with paper losses. The recipient of a gift of property gets the same tax basis in the property as the person making the gift. The appreciation occurring during the holding period is taxed when the gift recipient sells the property.

If the property didn’t appreciate when the owner had it, the beneficiary’s tax basis will be the lower of the owner’s basis and the current market value. When the investment lost value, the beneficiary reduces the basis to the current fair market value. The loss incurred for the owner won’t be deductible by anyone. There is no winner here. It is best for the owner to hold the loss property or sell it, so at least they can deduct the loss and gift the after-tax proceeds.

Give appreciated investment property after a price decline. This makes maximum use of the annual gift tax exclusion and minimizes the use of the giver’s lifetime estate and gift tax exemption. You can give more shares of a stock or mutual fund by making the gift when prices are lower.

Let’s say shares of a mutual fund were at $60—you could give 266.67 shares tax free under the annual gift tax exclusion ($17,000 in 2023). If the price dropped to $50, you could give 320 shares without exceeding the exclusion limit.

When the recipient holds the shares and the price recovers, they will have received more long-term wealth. The giver would not have incurred estate and gift taxes or used part of their lifetime exemption.

This is also an example of why families should consider gift giving throughout the year and not just at year’s end. An even better way: determine early in the year how much you intend to give, and then look for a good time during the year to maximize the tax-free value of the gift.

It’s good to give property most likely to appreciate in value. If the goal is to remove future appreciation from the estate, gift property you expect to appreciate. This also serves to maximize the wealth of loved ones, especially appreciated when the beneficiary is in a lower tax bracket. When the property is eventually sold, the beneficiary likely will pay capital gains taxes on the appreciation at a lower rate than the giver would. You pass on more after-tax wealth and reduce the family’s overall taxes.

Retain property if it has appreciated significantly. When it’s time to sell the property and the loved one is in the 0% capital gains tax bracket, it’s best to make a gift of the property and let them sell it. Even if the loved one is in the 10% capital gains tax bracket, this still make sense if you’re in the higher capital gains tax bracket. But there are some things to consider. If the gain pushes the recipient into a higher tax bracket and triggers higher taxes on all their income, it won’t be a welcome gift. If there’s no urgent need to sell the property, you can ensure a 0% capital gain by simply holding onto the investment.

Give income-generating assets. If you hold income-generating investments and you don’t need the income, consider giving those to family members in a lower tax bracket. This reduces taxes on the income and the recipient is also less likely to sell the asset to raise cash when it’s generating income.

Remember the Kiddie Tax. Heirs who are age 19 or under (or under 24 if they are full-time college students) are hit with their parents’ highest tax rate on investment income they earn above a certain amount, which was $2,300 in 2022. At this point, gifts of income-producing property create tax liabilities, not benefits.

Reference: Forbes (Dec. 27, 2022) “Smarter Ways To Make Estate Planning Gifts”

What’s Is the Best Way to Give to Charity?

Charitable giving plays a valuable role in estate and tax planning. A well-planned donation can also provide a healthy income tax deduction, along with a reduction of estate taxes. Your generous donation could help to maintain financial security, exert control over assets during life and after death and provide for heirs, as explained in a recent article titled “Charitable giving good for heart, 1040” from the Valdosta Daily Times.

To accomplish any of these objectives, you’ll want to work with an experienced estate planning attorney who can help tailor an estate plan to your individual circumstances. Here are some strategies to consider.

Gifts of appreciated property might allow you to avoid capital gains tax owed when the asset is sold and, if planned properly, might allow you to receive an income tax deduction, usually worth the fair market value of the asset.

Removing any assets from your estate reduces the potential estate tax liability.

If you want to make a donation to a charity but you’d like to maintain some control over it, a Charitable Remainder Trust (CRT) might be a good fit. A CRT works best when funded by an appreciated asset, such as real estate or stock in a family owned business.

Once the property is transferred to the CRT, the CRT can sell the appreciated assets it holds without paying capital gains taxes. It then continues to provide income generated by the CRT to the beneficiaries for a period of time, as instructed by the CRT. At the end of this period, the remainder of the CRT is donated to the charity. You avoid capital gains on the assets you donated, an income stream and you also receive a tax deduction.

Another strategy is to use a Charitable Lead Trust or CLT. With a CLT, you give the charity the use of the asset and the right to any income generated for a predetermined time. When the time period ends, the asset reverts to you or is given to whoever you designate in the CLT. Appropriate assets for a CLT could be income-producing stocks and bonds, a valued collection or a painting transferred to a museum for a certain period of time.

You likely receive a current income tax deduction for the value to the charity. However, you receive no other direct benefit during the term. If a CLT is created upon your death, estate tax liability could be reduced.

Early tax planning can help make the most of any charitable giving opportunities and let you take full advantage of any additional benefits. Talk with an experienced estate planning attorney to receive guidance appropriate to your unique situation.

Reference: Valdosta Daily Times (Dec. 4, 2022) “Charitable giving good for heart, 1040”

Why Do People Give to Charities at End of Year?

The landscape for charitable giving has undergone a lot of change in recent years. More changes are likely around the corner. This year, a more intentional approach to year-end giving may be needed, according to the article “How to Make the most of Year-End Charitable Giving” from Wealth Management.

From the continuing pandemic to natural and humanitarian disasters, the need for relief is pressing on many sides. Donors with experience in philanthropy understand charitable giving as part of a tax strategy, part of providing the essential support needed by non-profits to keep operating and respond to emergencies and, at the same time, ensure their charitable dollars are aligned with their family values and missions.

For the tax perspective, changes resulting from the Tax Cuts and Jobs Act of 2017 left many nonprofits harshly impacted by the doubling of the standard deduction, which gave fewer people a financial incentive to donate. The question now is, could the latest round of proposed changes spur greater giving?

Amid all of these changes, sound and stable giving strategies remain the wisest option.

The CARES Act encouraged individual giving during times of hardship, and tax breaks were extended in 2021. However, certain incentives are now closing, such as the ability to deduct up to 100% of adjusted gross income for cash gifts made directly to public charities.

The Build Back Better Agenda proposes increasing the long-term capital gains tax rate for individuals with more than $400,000 of taxable income, and married couples filing jointly with more than $450,000 of taxable income, to 25%, plus a 3% surcharge to income of more than $5 million. This would make charitable giving more attractive from an income tax perspective. However, this bill has yet to be passed.

Consider the following strategies:

Qualified charitable distributions. RMDs must be taken in 2021. For donors taking a standard deduction, a qualified charitable distribution is a possible option. If you are 70½ and over, you can donate up to $100,000 from an IRA. This satisfies the RMD, as long as the gift goes directly to a charity, not to a Donor Advised Fund.

Contributions of appreciated stock. To make charitable gifts in the most tax-efficient way possible, a donation of appreciated stock is a smart move. Donors receive a charitable income tax deduction (subject to AGI limitations) and avoid capital gains tax.

Charitable bequests. The uncertainty around income tax reform includes estate taxes, and pro-active individuals are now reviewing their estate plans with their estate planning attorneys.

Funding a Donor Advised Fund (DAF). A DAF allows donors to contribute assets to a tax-free investment account, from which they can direct gifts to the charities of their choice. The contribution to the fund provides the donor with a charitable income tax deduction in the year it’s made.

Reference: Wealth Management (Oct. 11, 2021) “How to Make the most of Year-End Charitable Giving”

Do People Get Divorced after Age 65?

Known as a “Gray” or “Silver” divorce, a couple who divorces in their 60s, 70s and beyond, faces different issues than a divorce earlier in life. Child custody and support are no longer an issue, but dividing up a lifetime of assets, while planning for long-term care in the midst of a divorce, can create its own complications, according to a recent article titled “How Silver Divorce adds a Wrinkle to your Estate Plan” from Westchester Business News.

Dividing Assets. With more assets, but little or no future earning capacity for either party, there’s more at stake in a silver divorce. How will retirement accounts be allocated, and will one spouse need to receive maintenance? A spouse may need to be kept on a life insurance or retirement account to protect them from poverty. Spouses with pensions need to investigate the rules for survivor benefits. It’s possible that a divorced spouse may not have access to survivor benefits, or one of the spouses doesn’t want the other to have access. This is all part of the negotiations.

Couples in their senior years are more likely to have comingled assets, including inheritances. This can create an issue, especially if the inherited assets have high value.

Taxing Matters. Transitioning from filing married jointly to filing single can have a big impact on annual income tax filing. The primary residence exclusion will also be impacted. This exclusion provides a tax exclusion from the sale of a primary residence of up to $250,000 for individuals filing single and $500,000 for those filing jointly.

The primary residence is often a couple’s largest asset, and if it was purchased 40 years ago at a lower cost than its present value, tax issues must be thoroughly evaluated. If the property is transferred to one of the spouses prior to the divorce, this may have a negative impact on the capital gains tax, if the property is sold. The $500,000 exclusion will drop to $250,000.

If the couple has a large estate exceeding their state’s estate tax exemption or the federal estate exemption, tax planning needs to change. The couple would lose the unlimited marital deduction, portability elections and the ability to utilize Disclaimer and Credit Shelter Trusts.

Planning for Long Term Care. If the couple has created a plan with their estate planning attorney for long-term care, it needs to be reviewed in light of the divorce. If the plan involved assets to be transferred to avoid the five-year look back period for Medicaid, those assets may be transferred to adult children or to an Irrevocable Medicaid Asset Protection Trust.

Estate Planning. Depending upon the state of residence, the final judgment of a divorce may revoke provisions and bequests in a Last Will and Testament—but it may not, so an estate planning attorney needs to be consulted. The same should be considered for the health care proxy, power of attorney or any similar documents.

Another fine point to be considered: divorces almost always take longer than anticipated. If one of the spouses should die or become incapacitated during the process, what would happen to the surviving spouse?

Reference: Westchester Business Journal (Oct. 4, 2021) “How Silver Divorce adds a Wrinkle to your Estate Plan”

Do You Pay Income Tax when You Sell Inherited Property?

From the description above, it’s clear the family had a plan for their land. However, from the question posed in a recent article titled “I inherited land that recently sold. What will I owe in taxes?” from The Washington Post, it’s clear the plan ended with the sale of the property.

For an heir who is expecting to receive a share of the proceeds, as directed in the mother’s last will, the question of taxes is a good one. What value of the land is used to determine the heir’s tax liability?

The good news: when the great grandfather died, the land passed to the mother and her siblings. To keep this example simple, let’s assume the great-grandfather’s estate was well under the federal estate tax limits of his time and there were no federal estate taxes due.

Next, the mother and her siblings inherit the land. When a person inherits an asset, they usually inherit both the asset and the step-up in the value of the asset at the time of the person’s death. If the great-grandfather bought the land for $10,000 and when he died the land was worth $100,000, the mother and her siblings inherited it at that value.

When the uncles sold the land after the death of their sister, the mother, her heirs inherited her interest in the land. If the person asking about taxes is an only child and an only beneficiary, then he should receive his mother’s one-third share of the land or one-third share in the proceeds. With the stepped-up basis rules, the son inherits the land at its value at the time of the mother’s death.

Assuming the land was worth $300,000 at the time of her death, the son’s share of the land would be worth $100,000. That’s his cost or basis in the land. If he sold the land around the time she died or up to a year after her death, receiving his share of $100,000, he would not have any federal income or capital gains to pay.

If the family sold the land for $390,000 recently, the son’s basis in the land is $100,000 and his sales proceeds would be $130,000, or a $30,000 profit. He would be responsible for paying taxes on the $30,000.

If the land was sold within a year of the mother’s death, there would be no tax to pay. However, after one year, any profit is taxed at the capital gains rate.

There will also be state taxes due on the profit and there’s an additional 3.8 percent tax on the sale of investment property. If the son used the home on the land as a primary residence, there would not be an investment property sales tax.

In this kind of situation where there are multiple heirs, it’s best to consult with an estate planning attorney to ensure that the transaction and taxes are handled correctly.

Reference: The Washington Post (July 26, 2021) “I inherited land that recently sold. What will I owe in taxes?”