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inherited property - need to sell

1 Answers. Asked on Jul 02nd, 2016 on Taxation - Georgia
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My late husband lived in Tx and I live in Ga. I received 11 acres in a sucession. I need to sell the property. Are the proceeds from the sale subject to IRS taxes
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Answered on Jul 05th, 2016 at 5:17 AM

You need to determine the fair market value of the property at the time you inherited it (generally, this means the date of death of your late husband, if he was the owner of the property). That is the new basis that you receive in the property for purposes of calculating capital gains or losses on a sale. Then, when you sell the property, in very big-picture terms, you subtract your basis from the sales price to determine the capital gains on the sale. The capital gains are subject to income taxes; the rest would be a recovery of your basis and not be subject to income taxes. The entire sales proceeds and your basis must be reported to the IRS on your income tax return, but not all of the sales proceeds would be taxable unless you have a $0 basis.

This answer is being provided as general information and not as legal advice. No attorney-client relationship is created by this answer.

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