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I Am Going To Inherit A House Left By My Mother. Will I Have To Pay Taxes When I Sell It?

Estate & Trust
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Charles Woodson, EA
It’s possible. Taxes are based on sales that generate a profit (gain). The gain is the difference between the selling price (net of selling expenses) and the basis of the house. The basis of a house that is inherited is the value at date of death. In many cases this value is often about the same as the selling price and therefore there is no gain. The longer you wait to sell the more likely for gain to increase. Gain from personal real estate is a capital gain and federal law has a lower tax rate for sales of assets held (owned) for more than a year. Inherited assets automatically are treated as having been held for more than a year regardless whether sold less than a year from the date of death.
Leave a Comment 309 weeks ago

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Michael Cash
It depends. If the sales price after costs of sale is more than what the house was worth when your mother died--your stepped up basis--you would owe tax at long term capital gains rates on the difference. You may even have a loss.
Leave a Comment 307 weeks ago

 

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