Do I include money received from the sale of a house I inherited on my income tax returns?

Question

I inherited a house from my parents and sold it. I realize that since I sold it within a few months there will be no tax. However, do I have to report the sale in any way on my tax returns?

Also, I was the beneficary on my father's annuity. He rolled over his IRA into this annuity. Am I required to count this as income and pay taxes on it? I received a 1099 on this.

Answer 1

Did your parents estate go through probate? How exactly did you receive the house? Via trust? Will? If it was willed to you, then part of the inventory process of the probate would have been to get the home appraised. This amount is important because the difference between the appraisal and the selling price is your capital gains/loss and that is what you need to declare on your taxes.

Answer 2

Let's correct a mistake. Just because you sold within a few months doesn't automatically mean no tax.

The day of the inheritance (i.e., the day the house legally belonged to you), the house had a market value. This is the "cost basis." You can add to the cost basis certain things, like additions. But, for now, let's leave it simple.

When you sell it, the difference between the cost basis and the sale price is profit. If that amount is under $250,000 (which I'll bet it is, given the short time period), then you owe no taxes on the sale.

However, you MAY owe taxes on the inheritance, depending on how it was given to you. You will need to check with a tax expert to confirm that it was given to you in a way that would not require paying any sort of inheritance taxes.

As for the IRA... If it was rolled over to you into another IRA, no taxes are due at this point. If you took it as cash (or other instrument), you may owe penalties and taxes. My guess is that you will. If you got a 1099, unless it's marked otherwise, it's income that you will need to report.

Answer 3

The sale of the house. What was the assessed value at the time you received it? This amount subtracted from the sale price leaves taxable income and should be reported. BE AWARE THAT YOU CAN APPLY THIS AMOUNT TO THE PRINCIPAL OF YOUR HOME AND DELAY THE TAX LIABILITY. In the event it was sold for less than the asses value, YOU CAN NOT CLAIM A LOSS.

The annuity is an INSURANCE PRODUCT it is not income and is not taxable. Record the 1099 as income and the annuity as non-taxable, for a net taxable base of "$0.00".

I am not a tax accountant, and I am sure that the rules that are given state a specific way to report. However the end result is the same.

Answer 4

you're mixing different tax regulations. What you pay on the valuables or any inheritnce is different than once you sell assets and reinvest in a clean assets. So, we would desire to appreciate in case you inherited the homestead and then bought it or if the homestead became bought first and then the proceeds of the valuables have been allotted to you. you apart from would would desire to hide the two Federal taxes and state taxes. If the homestead became bought as element of the valuables and then allotted: there's a federal assets tax exemption which became $675,000 for entire sources for 2001. In 2002 or 2003, the federal exemption larger to $a million million. In 2004, the exemption is $a million.5 million. i do no longer understand what this is presently yet think of that is on the factor of 2004 point. in the adventure that your mom lived in Connecticut, Indiana, Iowa, Kentucky, Louisiana, Maryland, Nebraska, New Hampshire, or New Jersey then you would would desire to pay an inheritance tax. you will would desire to envision with your state taxation place of work. in case you inherited the homestead and then bought it, then you had legal call to the homestead. once you sell you would be concern to capital beneficial properties taxes. you will prefer an accountant to be certain the quantity in case you lived interior the homestead in any respect. besides the indisputable fact that in many situations you will desire to stay in a house 2 out of the final 5 years and have that is your homestead of abode, there are some exceptions to that rule which you will qualify for.

Answer 5

yes and yes......not sure why you think there will be no tax...I'm 99% certain you will have to pay capital gains tax on the money you received from the sale of the house...and the 1099 must be reported as taxable income as well.... Sorry to be the bearer of bad news...

My grandmother passed away, leaving her house to her 3 children...they inturn sold the home..they had to split the gain from the house sale in 1/3's and each is required to pay capital gains on their 1/3rd of the money.....the gain from the house sale made their income enough that it made their social security income taxable also..leaving them owing the IRS close to $5,000 this year....

Answer 6

yes and yes. anything you received a 1099 on you must claim if over 600 dollars.

Answer 7

Call a tax attorney or your accountant. Do it now.