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emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3166
Experience:  IRS licensed Enrolled Agent and tax instructor
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In WV will I have to pay a capital gain tax on a house

Customer Question

In WV will I have to pay a capital gain tax on a house inherited from my mother who died on 11/02/14?
Submitted: 2 years ago.
Category: Tax
Expert:  emc011075 replied 2 years ago.
Hi. My name is ***** ***** I will be happy to help you. If the property is located in West Virginia and you have capital gains than yes, you will have to file WV tax return and pay capital gains.
To calculate your capital gains you deduct your basis from the sales proceeds (how much the house was sold for, regardless how much you actually received). Your basis are the fair market value of the house on 11/02/2014 plus selling expenses. Usually, when an inherited house is sold withing 6 month to 1 year, there are usually no or very little capital gains. You will most likely receive form 1099S so you will have to report the sale on your tax return to avoid future problems with IRS.
For example you sold the house for 150,000 and you paid 15,000 in selling expenses (transfer fees, recording fees, agent commission). If the fair market value of the home in November was 145,000 you calculate your capital gains as followed; 150,000 - 145,000 - 15,000 = (10,000). You have a capital loss.
Unless you used the property personally as your resident, you can claim up to 3000 of capital loss, the rest will have to be carried over to future years.
Let me know if you have any questions or need more clarification.
And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. Thank you.