If I inherit a house and sell it are there any tax consequences?

Answer 1

Kristi is correct; you will have capital gains on the amount by which the sales price exceeds the FMV on the date of death.

However, if you live in the house for at least two years before you sell it, then you would qualify to exclude up to $250,000 of the gain ($500,000 if you're married). In that case, unless your gain was greater than the applicable exclusion, you not only wouldn't have to pay any taxes on it, but the IRS doesn't even require that you report it.

Answer 2

If you have a gain on the sale, you'd pay capital gains tax on the amount unless in the meantime, you've lived in it for 2 years or more as your main home, then you might not have to.

Your gain would be the difference in the sale price from the value when you inherited it, less costs of any improvements and selling costs. So if you didn't have it long, you might not owe any taxes.

Answer 3

Please, please look up the inheritance laws for your state on a government website. There will most likely be taxes on the house, altho the amount could depend on who you inherit it from like a parent or child, or a person not related to you. Also, there could be what are called capital gains taxes incurred depending on how long you keep the house or sell it. You might even want to consider making it a form of income as a rental property as an addition to your retirement income as well as generate income on a continuing basis for a tax write-off if you are under 65 yrs.of age. It would be a good idea to find a good estate attorney who is current on the laws of this type and who could advise you on what is known as a living trust that could protect you and your own property from having a lien put on them for unpaid taxes.

Answer 4

You will have to pay capital gain taxes on any amount over the fair market value of the house when you inherit it.
Example, the house was worth $200,000 when you inherited it and you sold it for $225,000. You'd owe taxes on the $25,000.

Answer 5

Mr Tax Preparer is correct. One thing I would add is that SOME states have an inheritance tax.

Answer 6

Absolutely. Usually there is inheritance on money as well. I know that it depends on the state you live in. For instance in California you are taxed for the money you gained on the property. For instance if you purchased for $100,000 and sold for $300,000 you would be taxed on the $200,000 you profited. Since you did not pay anything for this house I am sure you will be taxed for he full amount that you paid for it. But the good news is, that you didn't pay a dime for anything so even if you get taxed, you are still making money by inheriting a house.

Answer 7

You'll have to pay taxes on the house when you sell it.