Do I have to pay Capitol Gains Tax if I sell the house I inherited?

Question

In December my Grammi passed away. I had been living with her for 3 1/2 years when this happened. She left her home to me in a living trust and I am living in the house at this time and have been told that if I sell it before I have lived in it two more years I will have to pay capitol gains tax on it as the title was just recently put in my name a few months ago. Is this true?

Answer 1

You would only pay capital gains on the house if you sold it for more than it was worth when you got the house.

Capital gains would be on the increase in value only.

I would say that to use the $250,000 deduction you would have to have owned the house & lived in it for 2 years.

It is important the you do all the things that need to be done.

Establish Value on date you reciveced the house.
How big was the estate or how many other assets did your grammi have?

If the estate was worth a lot of money there might be estate taxes
due. If this is the case was any taxes due & paid so the house is free & clear?

A living will lets assets be given away with out Probate but Estate
taxes & any other obligations your Grammi had have to be paid.

If the house was the only asset it could be use to settle these bills.

This is just to let you know that this is a case where you should seek professional advice.

Answer 2

You better talk to a tax advisor, and not rely on too much info here. I'm wondering though, if it helps that it was your principal place of residence for 2 of the last 5 years.

Answer 3

Assuming ownership of the house passed to you via her death, as opposed to an inter vivos trust, the base value of the house for capital gains tax is the value at the time the ownership passed to you. Since it is so recent, it is unlikely any significant capital gain occurred from December to present.

Answer 4

god help him