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Do I have to declare a capital gain if I inherit a second home, sell it and then reinvest it in another second home?
— Jane G. Ore.

Yes, but if you sell it right away there should be little or no capital gain. The “basis” — the number you subtract from the sale price (minus any transaction costs) to figure your gain — is the value of the house when you inherited it, not when it was purchased by the person who bequeathed it to you. In this market, the house is unlikely to appreciate much — especially if you price it for sale aggressively, based on a fresh appraisal. So you can pretty much eliminate the gain.

If you did have a gain, there are ways to roll it over into another property, but it’s a complicated process with restrictions that make it most useful for investors who buy and sell homes over time.

In any case, you should review all this with the attorney handling the estate.

My husband and I have negotiated with his grandmother to buy part of her farm. They have no money to pay for the land survey, so we are paying it and it will come out of the final amount that we both agreed to. I know we need to do a title search and I have someone who is a paralegal to do so and will do it at no cost to me. We are unsure of where to go from here. What are the next steps to take? Do we need a lawyer? Why?
— Kellie S.,  Willard, Ky

Yes, you need a lawyer — because every real estate transaction is different.

And if you miss something when you set up this one, you may end up — sometime way off in the future — costing yourself much more than the few hundred dollars a lawyer will cost you.

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