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Barrister
Barrister, Attorney
Category: Estate Law
Satisfied Customers: 33803
Experience:  15 yrs estate law, real estate. Wills/Trusts/Probate
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My 2 brothers and I inherited my grandfather's house when he

Customer Question

My 2 brothers and I inherited my grandfather's house when he passed away earlier this year. What are the tax liability when we sell the house?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Barrister replied 1 year ago.

Hello and welcome! My name is ***** ***** I will try my level best to help with your situation or get you to someone who can.

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Can you tell me what state this is in?

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Did grandfather have any debts when he passed?

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Has the house already been transferred to you and brothers from the estate?

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thanks

Barrister

Customer: replied 1 year ago.
The house is in California. My grandfather didn't have any debt. The estate had been transferred to me and my brothers.
Expert:  Barrister replied 1 year ago.

Ok, when you inherited the house, you would receive it at a "stepped up basis" equal to the fair market value of the house at the time of grandfather's death. The basis is what the IRS considers your cost for any capital gains. So if the house was appraised at $500K at the time of his death, and you sell it for $550K, then you would have long term capital gains taxes on only the $50K of gain.

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But normally, if a sale occurs within 6 months of the death, then the sale price is considered fair market value so there is no capital gain that is taxed and you would divide the proceeds tax free.

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thanks

Barrister

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