taxes on money received from the sale of a home ?

Question

we received money on the sale of a home from my husband's relative who passed away a few months ago; the sum was divided between several family members. Do we have to pay taxes on this?

Answer 1

if it was inheritance, no

Answer 2

Judy is essentially correct, but she is mixing terms. There is never a Federal inheritance tax. If the estate is large enough, there may be an estate tax. This would be paid out of the estate before the family receives anything. Some states do have a state inheritance tax that is paid by the heirs.

Answer 3

The estate might have to pay state taxes on the inheritance. Unless the estate was very large, there wouldn't be federal inheritance taxes due.

You wouldn't pay income tax on the inheritance, although if there was gain AFTER the relative's date of death, that might be taxable to you. If it's only a few months, the value of the house isn't likely to have gone up that quickly.