Avoiding inheritance tax

[Cyndi Lees]

I inherited a property in Arizona when my mom passed away last October and I'm finally getting around to figuring out what to do with it. I received the property through a guarantee deed (quick claim) that my parents filed in 2006.

I own my own home in California and I'm still paying a mortgage. If I sell the home in Arizona I can pay off my mortgage and have some left for retirement. I'm 67 years old and I barely make it on SS.

The house in Arizona is paid off so I could rent it out and it would be cash flowing. I'm trying to figure out how much I will owe in taxes if I sell it now or if I sell it after it's been a rental. Will it make a difference? I'm really emotionally attached to the house in Arizona so I'm leaning towards renting it out until I work through the grief however, I need to avoid paying a huge amount of inheritance tax. Any advice would be appreciated and I also could use a referral to a tax professional.

Thank you so much!

[Ned Carey]

@Cyndi Lees

          "I received the property through a guarantee deed (quick claim) that my parents filed in 2006."

What do you mean by that? if they deeded it to you in 2006./ She  didn't own it when she died, you did.  So no inheritance tax. 

If your mother did own the property when she died, then an estate has to be opened to transfer the property to you. At size of estate there is no federal inheritance tax. There may be state inheritance tax. 

Presuming the deed is not in your name already you are going to need legal help. Sadly that will cost money. But given the value of the property you should be able to afford an attorney.