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bblock
New Member

Is the he profit from the sale of a decesaed parents condo an inheritance, and is it taxable on a federal return?

My wife's mother passed away in 2010, and was survived by her 5 children.  She owned a condo.  The children permitted a sibling to live in the condo until her passing in 2018, and then proceeded to sell the property.  The sale amount was divided between the 4 remaining siblings and the deceased siblings children.  Is this an inheritance and is it taxable?  

1 Best answer

Accepted Solutions
Coleen3
Intuit Alumni

Is the he profit from the sale of a decesaed parents condo an inheritance, and is it taxable on a federal return?

It is an inheritance, and as such, your basis in the property is the Fair Market Value on the date of death. Divide the basis and sales price between any inheritors. If there is a gain, it is taxable. You can add closing costs to the basis to reduce the gain.

The only deductible closing costs are those for interest, and deductible real estate taxes. Other settlement fees and closing costs for buying the property become additions to your basis in the property. These basis adjustments include:

    * Abstract fees,

    * Charges for installing utility services,

    * Legal fees,

    * Recording fees,

    * Surveys,

    * Transfer taxes,

    * Title insurance, and

    * Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.


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3 Replies
Coleen3
Intuit Alumni

Is the he profit from the sale of a decesaed parents condo an inheritance, and is it taxable on a federal return?

Was the condo gifted before the death of the parent?
bblock
New Member

Is the he profit from the sale of a decesaed parents condo an inheritance, and is it taxable on a federal return?

No.  My mother-in-law died without a will.  A son-in-law had power of attorney and worked with a lawyer who worked with the court to make the sale.
Coleen3
Intuit Alumni

Is the he profit from the sale of a decesaed parents condo an inheritance, and is it taxable on a federal return?

It is an inheritance, and as such, your basis in the property is the Fair Market Value on the date of death. Divide the basis and sales price between any inheritors. If there is a gain, it is taxable. You can add closing costs to the basis to reduce the gain.

The only deductible closing costs are those for interest, and deductible real estate taxes. Other settlement fees and closing costs for buying the property become additions to your basis in the property. These basis adjustments include:

    * Abstract fees,

    * Charges for installing utility services,

    * Legal fees,

    * Recording fees,

    * Surveys,

    * Transfer taxes,

    * Title insurance, and

    * Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.


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