If you own an S corporation with a rental property as its sole asset, you may wonder how your heirs will be taxed when they inherit it. Unlike personally owned real estate, the property itself doesn’t receive a step-up in basis—but don’t worry, your heirs can still achieve the same tax benefit. Here’s how:

𝐇𝐨𝐰 𝐘𝐨𝐮𝐫 𝐇𝐞𝐢𝐫𝐬 𝐀𝐯𝐨𝐢𝐝 𝐚 𝐓𝐚𝐱 𝐇𝐢𝐭
• Your heirs inherit the S corporation stock at its stepped-up fair market value.
• When the S corp sells the rental property, it recognizes a gain.
• This gain increases your heirs’ basis in the S corp stock.
• Upon liquidation of the S corporation, your heirs recognize a capital loss that offsets the earlier gain.

𝐓𝐡𝐞 𝐄𝐧𝐝 𝐑𝐞𝐬𝐮𝐥𝐭?
• Your heirs can potentially sell the property tax-free, achieving the same outcome as a traditional rental property basis step-up!
• Estate planning for S corporations can be tricky, but the right strategy can preserve your wealth and minimize taxes.

Need help structuring your plan? Book a free consultation today!
Link: https://sigmataxes.com/

𝐒𝐢𝐠𝐦𝐚 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐧𝐭𝐬
Healthy numbers. Wealthy life.

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