Last year my wife was given a house by her parents. It was the house that she and I had long been living in. About three months later, we sold the house and moved to another state. Two or three months after we sold, her dad died. We are going to have to pay capital gains tax. However, if the home had been an inheritance, I don't think we would have to pay the capital gains tax because there would be no gain (based on Fair Market Value at the time of the death). Can a gift of a home be considered an inheritance if the donor dies soon AFTER the home is given?
