Do I pay capital gains tax on an inherited home that I sell for less than the appraised amount?

Answer by  WileyAccountant (6)

You will pay capital gains tax on the sale of the inherited home for the amount of the sales price that exceeds your basis in the home. The basis of the home is the fair market value assigned by the estate plus any additional improvements you made on the home.

Answer by  tamarawilhite (17883)

The capital gains tax is paid on the difference between the valuation it had when inherited (and may have had inheritance tax paid upon it) and what it sells for. If it sells for less than you inherited it at, you may be able to write off a capital loss.

Answer by  quisqualis (1756)

Capital gains taxes are assessed when the house is sold for more than its worth at the time you inherited it. The fact that you sold the house for less than its appraised value is not a factor in assessing capital gains, only the house's value when received and when sold matter here.

Answer by  Taxmatters (169)

The appraised valueof the home has no bearing on your reporting gain. It is based on the fair market value when inherited.

Answer by  Cecilia (2828)

The basis of the home (value of home for tax purposes) becomes what it is worth on the day you inherit. The costs associated with selling the home are deductible from the sale price. If you sell it for less than the basis you have a loss not a gain.

Answer by  jnutz99 (5)

What forms do I have to file with the IRS regarding this sale?