How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Robin D. Your Own Question
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13344
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

My wife and her Brother inherited some land in Waxahachie

Customer Question

My wife and her Brother inherited some land in Waxahachie Texas in 1992 and to my knowledge paid no inheritance tax at the time. The land was sold this year 2015 for exactly $200,000. Both my wife and her Brother received $100,000 each and tax forms were completed and sent to the IRS on the sale date.
My question is as follows: what tax would be due on our 2015 return for the $100,000. I have been told that it would be treated as capital gain but I can find no cost basis of what the property was worth at the time of inheritance versus what t was sold for.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Hello

You were told correctly. The gain (difference in cost plus improvements and sale less costs to sell) will be taxed as a capital gain.

You will need to look back at the tax records for the value when the property was inherited. You can contact a real estate professional and see if they have records from back then (with the internet research can be used).

If you do not get the fair market value on the date of death you will have to use $0.

That would mean you pay tax on the entire $100,000.

I hate to have to tell you that but the IRS requires the basis.

Respond below please.

Expert:  Robin D. replied 1 year ago.

Willard, you stated "I can find no cost basis of what the property was worth at the time of inheritance ", where have you tried to find this info?

Expert:  Robin D. replied 1 year ago.

Hi

I looked into the USDA resources (I know USDA finances many loans in Texas) for past land values.

You can see their 1993 info here

http://peanut.tamu.edu/files/2012/04/ALV94-9811.pdf

Most land that was not improved was at $700 an acre.

Let me know if that link above worked for you.

Thanks

Expert:  Robin D. replied 1 year ago.

I really enjoyed working with you – please feel free to request me again when you come back to ask another question.
Rating lets Just Answer know you were assisted and credits me for my time.