Does anybody know if You have to pay capital gains on a mobile Home That was inherited? Thanks?

Answer 1

When the mobile home passed to you, you received it at it's market value at the time you inherited. The market value is the new cost basis for you. (This should have been in the probate judgment if they itemized the estate's assets.)

If you sell the property within a short period after probate is settled, the sale establishes its market value and you have a gain of $ zero.

(The reason for this is because you can only be taxed on the amounts that you gained while you owned the property. The amount of appreciation while the original owner was still alive would be taxed to the original owner through their estate tax, if it applies.)

If you wait awhile, I think a year or more, and you sell for more than it was worth, you have a gain.

If you lived in the mobile home for 2 years or more, it became your residence, and you can claim the first $250,000 of capital gain tax free. (Double if it was jointly owned with your spouse.)

Answer 2

Maybe.

When the MH passed to you, you get the stepped up basis of its fair market value. If you sell it for that or less, there is no gain. If you sell it for more, the tax treatment depends upon how long you owned it. If it's less than 1 year, the gain is taxed as ordinary income at your marginal rate. If you owned it for 1 year or longer, the gain is taxed at the long-term capital gains rate of 15%.