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TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 15716
Experience:  15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
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If you sell an inherited home that was appraised at time of

Customer Question

If you sell an inherited home that was appraised at time of death at $380,000 and just recently sold for $418,000 do we need to pay capital gains on the difference or is there a provision where we do not have to pay since we sold it right away? Also isn't there a one time deal where you can avoid capital gains tax on the sale of a property?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  TaxRobin replied 1 year ago.


The cost or basis of inherited property is the value of the property on the date the deceased passed. If that was $380,000 then you would pay tax on the amount over the cost.

This is long term holding period (because it was inherited) so the lower capital gains rates apply. That means it could be 0% to 20% instead of the regular rates for income tax.

There is an exclusion form gain but that is for a person that sells a house they owned and used a s their main home for at least 2 of the last 5 years prior to selling. There is no one time avoidance of capital gains tax unfortunately.

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