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Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55153
Experience:  29 years of experience as a tax, real estate, and business attorney.
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I inherited a house in the state of Maine and was put on the

Customer Question

I inherited a house in the state of Maine and was put on the deed with my two brothers to sell the house.My oldest brother was administrator of the estate.He sold the house for 70'000 dollars more than it was paid for by my father 20 years earlier.I live in N.J and received a letter from the state of Maine saying I have to give them my federal tax return for 2012 to see if I owe them money.I never was told I had to put the proceeds of the money I received on any tax form.I've sold two houses in my name in NJ and have never paid taxes.Who do I owe money to now that I have received this letter?
Submitted: 1 year ago.
Category: Tax
Expert:  Richard replied 1 year ago.

Hi there. You won't owe any taxes so you need not worry. When you inherited the house, the basis of the house was automatically adjusted to its fair market value as of the date of death. So, then when it was sold for that amount, there would be no gain and thus no tax. But, the title company does issue 1099's to report the proceeds received so this is likely the cause of this inquiry. What you will need to do is amend your return to report the sale (otherwise the government treats the basis as zero and treats all the proceeds as gain). On the return, you report the sale on Schedule D and Form 8949 and enter the basis and the sale proceeds (less closing costs) which will indicate there was no gain the sale and thus no tax. :)

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