If you’ve inherited an estate in New Hampshire, you may be wondering, what about capital gains tax?
What is it, how much is it, and do I need to pay it? Thankfully, we’ve got the answers.
What Is Capital Gains Tax?
When you inherit an estate, you gain ownership of the estate including the assets within it. Assets are things like cash, stocks, real estate, or collectibles. In other words, if someone dies with a house or a $200,000 stock portfolio, everything they own is subject to capital gains tax. Capital gains tax is the taxes you’d owe when selling the assets you inherited. It’s calculated using the proceeds from the sale of the inherited assets, usually at fair market value.
How Much Capital Gains Tax Do I Owe?
In New Hampshire, you will only pay capital gains tax if you sell the shares you inherited. The actual tax rate you pay depends on the stock’s price at the time of the sale. However, you should be aware that most shares have their earnings taxed immediately as ordinary income, not capital gains. If you inherited a stock which you don’t plan on holding for the long haul, there is no tax to pay on your capital gains.
What Can I Do to Lower My Capital Gains Tax?
Here are some tips to reduce the tax on your estate: Limit your gains. If you sold a property within the last two years, you have the opportunity to cut your capital gains taxes by waiting up to three years. Capital gains tax in New Hampshire begins to accrue on the first $11,000 of a sale in a year and increases for each $1,000 over that amount. For example, if you bought a house for $250,000 and sold it for $300,000 in 2016, you could realize a $30,000 capital gain tax-free. But if you purchased a house for $200,000, then sold it for $300,000 in 2017, you’d owe $5,000 in capital gains taxes. In the latter case, if you were over 65, you would be subject to a 10 percent surcharge.
New Hampshire, along with the rest of New England, is going to be the best state in the region to sell stocks and buy new stocks. Thanks to the New Hampshire Access to Capital Act (H.4206), capital gains are limited to 3% of the market value of the assets sold. In the process, only an estimated 180 new investors will be created across the state, and an additional 600 from other sources. If you’ve inherited an estate in New Hampshire, or you’re working on your own, take a look at H.4206 and see how it will affect your estate.
Contact N.H. Home Buyers
If you have inherited a property that you’d like to get rid of quickly in order to avoid accruing any more capital gains tax, contact NH Home Buyers today. We buy homes in any condition fast and in cash, so you don’t have to worry about your home’s value appreciating over time. Call us today to get your no-obligation written offer, we serve the Manchester, New Hampshire, area.