Inherited house with mortgage

FMV at time of death $225,000 with a mortgage of $40,000

is the basis of the house $185,000 or $225,000 when calculating the loss?

Sold for $225,000 - (selling, fix up cost of $25k) =$200 net

Do I have a loss of $25 or a gain of $15?

Thanks

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2 Replies

$225K. the mortgage doesn't affect your tax basis.

[Edited 2/17/22 8:56 PM EST]

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