Same commet as for question #1--with the added incentive that none of you guys stand to benefit by any advice, or sales opportunity you create.

At some point, my wife and I stand to come into a decent ( for us) inheritance. I would estimate the cash at about $150K, and a mortgage-free town house with a value of about $225K.
We would entertain the idea of moving to another ( more tax-friendly) state. Does it make more sense to sell both houses, and move, and use whatever cash is needed to buy a new house, or to pay off the current mortgage on out house, and then sell it, and move.

Is one of these a better strategy than the other?
The idea is to get into a new house free of debt, and have some cash to put with existing investments, and SS.

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags

Look at the State tax schemes in every state you might move to.

As a really good realtor for their suggestions. Likewise a good tax/inheritance attorney -- and also a expert stockbroker to put together a suggested varied, balanced and robust yet safe stock portfolio for you for what does not get spent on a new home.

And for that move, you need to decide whether to buy the new home for cash, or with a down payment and whether or not it would be worth it to rent out or simply sell off the residences; if you rent, a bad renter can drag out the eviction (and make you go to court) for 6 months; and trash the property during that time; to avoid the "broken toilet at midnight" calls, you will need to hire a management company for that stuff; for which you need to pay (typically) about 10-20% a month of the rental, often times.

I hope you choose well. Go with your wife and actually visit where you might move and talk to some locals. Perhaps a connection can be found in your church denomination near or in, your new possible hometown?

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1991 560 SEC AMG, 199k <---- 300 hp 10:1 ECE euro HV ...

1995 E 420, 170k "The Red Plum" (sold)

2015 BMW 535i xdrive awd Stage 1 DINAN, 6k, <----364 hp

1967 Mercury Cougar, 49k

2013 Jaguar XF, 20k <----340 hp Supercharged, All Wheel Drive (sold)

I am off to Nevada again, tomorrow, (I am currently living only about 100 miles away from the border/Reno) as I too am seriously considering relocating to a more tax friendly state - and Nevada is one of the best, as I am told they have no State income tax at all; and the State tax is about 7.5% and in California it is more, 10% in some places. And California is incredibly over regulated in my opinion.


As an aside, Nevada might be more comfortable politically for you, as you have opined that Maryland is way too liberal for your taste and preferences.

Nevada is far more conservative than most of California, especially the greater SF and LA areas.

And spending more and more time in Nevada, I am discovering that the conservatism there becomes more and more comfortable (for me) and understandable. It is not too hard to come to terms with, in light of the conditions that exist for somebody seeking a pleasant and comfortable life there...

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1991 560 SEC AMG, 199k <---- 300 hp 10:1 ECE euro HV ...

1995 E 420, 170k "The Red Plum" (sold)

2015 BMW 535i xdrive awd Stage 1 DINAN, 6k, <----364 hp

1967 Mercury Cougar, 49k

2013 Jaguar XF, 20k <----340 hp Supercharged, All Wheel Drive (sold)

Frankly, even if renting long distance, you do NOT need a management firm, and the risk of finding a tenant that will trash your place is slim. You just need to look for the correct kind of tenant -- good PERSONAL references, presence online that shows that the person is who they say they are, hopefully somewhat technically proficient and capable of unclogging a toilet themselves. Rent should be 5-10% under market to give you a wide choice of potential tenants.

I know that anything that is received in an inheritance is tax free unless it is in in the millions of dollars and even then I think the first five mil is exempt.

Check out Schedule D to see how to deal with this. (At least that's what my accountant said, I really don't know.)

Texas is nice in parts, but overall not as Conservative as Gov. Perry would like you to think. I get all over the state and it is very rare to meet a fire breathing Conservative although you do meet a lot of weirdos that think they are the second coming of Sam Houston.

And while there is no state income tax in Texas property taxes are very, very high (depending on where you live) and the level of city services are tied 100% to your property tax levels.

One good thing about Texas is that you can live out in the country where taxes are cheaper and be in a big city where taxes are higher in less than an hour. For example: I do a lot of shopping in Highland Park but I don't live there. This is the case for many people.

And although this may sound odd: Check out what people think of the Mercedes dealer before you move to an area. Park Place in Dallas is very nice and the people in Dallas tend to be friendly as well. The two Mercedes dealers in Oklahoma are so-so and that would describe a lot of the folks here, too.

This might seem like a weird standard to live by, but it seems to work as good as anything else.

Capital tied up in property is not all that productive. Live in a modest paid for house and invest in a fund with established long term strong performance. Or spread the risk by picking three of them. We do not put everything on the line so to speak.

Stop loss orders can be your friend. I think the market will probably drift lower soon but nobody knows for sure. In Canada the day of transferable morgages with the property is gone. Maybe not in the United States but I suspect they are similar.


When the property is vended part of the proceeds are used to pay off what is still owing. So either way you will have to pay it out usually.

COUIPLE OF QUESTIONS:

Do the folks from whom you will inherit the property live in MD and is the real property located in MD.
What relationship do you or your wife have with either of the soon to be decedents, if any?

Read this:
Overview of Maryland Inheritance Tax Laws
and this..
http://registers.http://registers.maryland.gov/main/packets/AdministrationBooklet2013final.pdfmaryland.gov/main/packets/infoguide.html

Bad news: Md is the only state besides NJ that has both an inheritance AND an estate tax. Md's estate tax level is currently 1 million, so this is not in play for what you are expecting to inherit. Once inherited, look at your own resulting estate vis a vis the 1 million number.

You may be subject to the inheritance tax, depending on the relationships, if any...
Each beneficiary of a Maryland estate receives an exemption from the inheritance tax based on the beneficiary's degree of relationship to the decedent. Here are the exemptions from the inheritance tax that are currently available under Maryland law:..............
p 19 of this lists what relationship of beneficiaries is exempt. If you don't qualify for exemption, the tax is 10%.
http://registers.http://registers.maryland.gov/main/packets/AdministrationBooklet2013final.pdfmaryland.gov/main/packets/infoguide.html

So, an estate of 375,000 would apparently incur a 37.5 k inheritance tax maximum. You get a basis in the town house of 225k ,its FMV at DOD. Sell it the day after you inherit it and there is no gain and no CG tax.

How much do you love living in your present home? How much built in gain does it have? What do you want to do in retirement & where do you want to live? You & the missus can possibly defer 250k of gain each on the sale of your principal residence if you meet several tests. One scenario could possibly be to sell your home & move into the TownHouse. Live there until you retire & go to Florida (or another state) where there are no longer any state death taxes.
Most states did not change their laws 13 years ago when the federal law changed and today do not have estate or inheritance taxes. You and I happen to live in states that have both. Is it a coincidence they both happen to be broke, traditionally blue states?

I have only given the attached materials a cursory view, so I can't tell if there is any advantage to moving before you come into the inheritance, since you did not mention where the decedents live?. I assume they also live in MD and the RE is in MD too.

Thanks all--I am considering the advice given.
Too many roots in the mid-Atlantic to consider moving too far away.

The inheritance will be from my wife's mother. My wife is an only child. her name is already on the bank accounts. Total value no close to a #Mill.

At this point, Hat's advice about running it as a business, or not at all seems very wise.

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1982 300SD " Wotan" ..On the road as of Jan 8, 2007 with Historic Tags