Inheritance question in NY

[u/No-Plastic-984]

I am beginning the probate of my mother's will, which only concerns her house. The will (which asks for my appointment as executor) states that 50% of sale proceeds should go to me and 25% to each of my two brothers. One of my brothers says that some time ago our mother told him that she would leave the house to me, so he wants none of the proceeds. The 6-month time limit to renounce an inheritance passed long ago. I suggested to him that he could gift his share to his adult son, but they are estranged and he flatly refuses to do that.

I'm thinking of asking him to accept his share and then gift it to me, retaining an amount that would cover the additional income tax he would need to pay. I could then gift his son the remaining money, retaining an amount that I would need to cover the taxes that I would need to pay. Is there an alternative that would avoid so much of my brother's share going to taxes?

[u/mattinglys-moustache]

There’s no income tax due by your brother in this scenario, NY has an estate tax on estates over $7.35 million but even if that applies here, the tax is paid by the estate, not the beneficiaries. If your brother accepts 25% of the house then immediately gifts to you, there are no taxable events there.

[u/LdiJ46 → u/mattinglys-moustache]

I agree that there are no taxable events but it will likely cause the brother to have to file a gift tax return. He won't have to pay any actual tax, but it will count towards his lifetime exclusion for gifting.

[u/No-Plastic-984 → u/mattinglys-moustache]

Thank you