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TaxRobin, Tax Preparer
Category: Capital Gains and Losses
Satisfied Customers: 15332
Experience:  15+ years in Tax preparartion as well as Instructor for tax law, theory, and application
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When my father passed away, my brother and I divided a

Customer Question

When my father passed away, my brother and I divided a $500,000 estate equally per the terms of the will. My brother received his half in cash. I received my half in a house and cash. My husband is a pastor, so we continued to live in a parsonage, saving the house for our retirement. We allowed our daughter and family to live in the house. Now we have sold the house to our daughter and son-in-law. Its value when Daddy passed away was $120,000. It now appraises at $178,000. What do we owe in capital gains tax?
Submitted: 1 year ago.
Category: Capital Gains and Losses
Expert:  TaxRobin replied 1 year ago.


Whet you will owe is dependent on your total income for the year. Inherited property is allowed to be considered "Held Longterm" no matter how long you actually owned it. This lets you use the Capital Gains Rates instead of ordinary tax rates.

Capital Gains Rates are set by your filing status and income for the year. It could be 0% rate or up to 20%.

The tax rate on most net capital gain is no higher than 15% for most taxpayers. Some or all net capital gain may be taxed at 0% if you are in the 10% or 15% ordinary income tax brackets.

However, a 20% tax rate on net capital gain applies to the extent that a taxpayer’s taxable income exceeds the thresholds set for the 39.6% ordinary tax rate ($413,200 for single; $464,850 for married filing jointly or qualifying widow(er); $439,000 for head of household, and $232,425 for married filing separately).

It really depends on your income for the year not just the gain on the sale.

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Expert:  TaxRobin replied 1 year ago.

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