Are revenues from the sale of inherited items subject to IRS federal income tax in the U.S.?

Answer 1

If you sell them at a gain, yes, the revenues are subject to IRS federal (and state as well) income tax in the U.S. The good news is that inherited items are treated as long-term gain no matter what the holding period is. Long-term gains are taxed at a maximum rate of 15% (5% if you are in 10% or 15% tax bracket). Depending on what the inherited items are, if you sell them at a loss you could have capital loss, which can be offset against capital gains, and if losses are more than gains, you can use up to $3,000 ($1,500 if married filing separately) per year against other income, any excess is carried forward to use in future years.

Answer 2

The answer is that they could be. Generally, the cost basis of the item is the value of the item when it was inherited. If you sell the item for a gain, then you need to report it on Schedule D as a capital gain.

Answer 3

The total revenues aren't - but if you have a gain on its value for the time after you inherited the item, then the gain is taxable as a long term capital gain.

Answer 4

Yes, I would think you would be better served by having them appraised and added to your insurance policy and held, this way you can count them in with your personal net worth.