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Chad CFP ®
Chad CFP ®, CERTIFIED FINANCIAL PLANNER TM, Professional
Category: Tax
Satisfied Customers: 616
Experience:  Managing Director at Caros Group
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Parent lived in a secondary house. she passed away and we

Customer Question

parent lived in a secondary house. she passed away and we are selling the house. do we have to pay taxes on capital gains from sell?
JA: The expert will know how to help. Please tell me more, so we can help you best.
Customer: we live in arizona the house is in colorado
JA: Is there anything else important you think the expert should know?
Customer: we have not lived in house for the past 5 years, the parent has.
Submitted: 2 months ago.
Category: Tax
Expert:  Chad CFP ® replied 2 months ago.

Hello, My name is***** am a Certified Financial Planning ® Professional. I am also registered with the IRS and have obtained a valid Preparer Tax Identification Number . Welcome to JustAnswer!

When the parent passed away the cost basis of the home "steeped up" in value to the fair market value based generally on the date of death of the owner of the home.

Continued. ...

Expert:  Chad CFP ® replied 2 months ago.

The new cost basis based on the Fair Market Value (FMV) at the date of death is passed along to whom ever inherited the home.

Therefore, if the home value on the date of death is $100,000 and you sold the home soon after the date of death it would be assumed you sold the home for the fair market value of $100,000.

Generally, no taxes are due when a home is sold soon after the home is inherited, in fact you may incur selling cost and have some expenses to deduct.

If you do have further questions or if my answer was incomplete or needs further clarification please let me know and I would be happy to extend my answer.

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Chad CFP ® professional