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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Mother passed in May, left home to me and sister in a ...

Customer Question

Mother passed in May, left home to me and sister in a trust. If the house is sold will there be any California or federal estate taxes or inheritance taxes?
Submitted: 9 years ago.
Category: Tax
Expert:  Merlo replied 9 years ago.


When you and your sister inherited the home from your mother, you were each entitled to a "stepped up" basis in the home. That means that whatever the fair market value was of the home on the day of your mother's death, that would be your new basis in the home.

When you sell the home, you are liable for tax on any gain realized from the sale. Your gain will be calculated by taking the selling price less your basis. Since your mother just passed away recently, then chances are that there will be little or no gain on the sale, since your basis was the fair market value of what the home was in May when she passed away.

If there is any gain on the sale, it would automatically be taxed at the long term capital gains tax rat which is currently capped at 15%.

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Customer: replied 9 years ago.
Thank you for your quick response. I appreciate your advise.