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EasyWayToSellYourHome provides a fast and fair solution for local homeowners. We will purchase your property as-is, helping you to sell your house in days, not weeks or months. We are Florida locals, who take a sincere interest in helping members of our community when they need it most.
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What Are the Tax Consequences When Selling a House Inherited in Port St. Lucie?
Capital Gains or Losses Taxes The tax consequences when selling a house inherited in Port St. Lucie include being subject to capital gains taxes. Capital gains or losses are those that stem from the sale of items you use for personal or investment purposes, such as stocks or a house.
Reporting the Inherited House In some cases, the executor has to file an estate tax return to report the inherited house. But this is only if the estate exceeds the inflation-adjusted exemption amount. The determination of the gain or loss on a house sale depends on the “basis” of the house. As the basis goes higher, the taxable gain from a sale decreases.
“Basis” Determination The basis of the house depends largely on when it was inherited. In general, the basis is the fair market value on the date of the decedent’s death. What this means is that the capital gains taxes you owe are based on gains above the property value at the time of the decedent’s death – not what the decedent paid for the house.
Reporting Sale of the Inherited House Obviously, when you sell an inherited house, you have to report the sale (and gains or losses) when you file your income tax return. To calculate the gain or loss, you have to subtract the basis from what you received for the sale. To report the gain or loss, you need to use the standard document for this purpose, the IRS Schedule D. You also have to include the gain or loss on your personal Form 1040 tax return.
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