Have a Tax Question? Ask a Tax Expert
Hello JA Customer,
Since this person's estate was less than $3.5 million in the 2009 tax year when he passed away, none of the assets in his estate would be subject to estate taxes. The only assets that may be subject to tax would be if he had any money in an IRA account or similar tax deferred retirement account. If that is the case, you would owe regular income taxes on the amounts in those accounts when the money was withdrawn. If he had no such tax deferred accounts, then you would not actually owe any taxes on the value of the assets inherited.
If you now plan to sell the home which you inherited, you would only owe taxes if you have a gain from the sale. When you inherited this home in Nov of 2009, you would have been entitled to a stepped up basis in the home. What that means is that your new basis became whatever the fair market value was of the home on the day he passed away. If you now sell the home for more than that basis, you would owe capital gains tax only on the gain. However if you are selling the home for the tax assessed value, then it sounds as though you are selling it for the same amount as what it was worth in November of 2009, in which case you would have no gain and no tax liability. It does not matter that the home is passing directly from the estate to his relatives.
If this was helpful please press the Accept button. It is the only way we receive any credit for helping with these questions.
Thank you JA Customer