My mother died on 30 October, 2016, and I was the beneficiary of her 50% equity in house that she and my stepfather owned in Florida. I did not have access to those funds immediately because they were tied up in a life estate interest to my stepfather until his death or vacating the property. He is now selling the property for $450K. According to Zillow the value of the home in October 2016 was $258K. Based on those numbers I calculate my potential capital gains at (50%) x ($450K) - (50%) * ($258K) = $96K.
First question: Will I have to pay long term capital gains taxes on the $96K, since I did not have a choice in the liquidation of assets until now because the assets were tied up in a life estate to my stepfather?
Second Question: Are Zillow estimates valid for determining the cost basis, OR if audited do I require a documented appraisal which would cost me $500?
Last Question: My primary residence is in MD? If I do have to pay long term capital gains taxes, will I have to pay federal, Maryland, and Florida taxes on the capital gains?
Thanks for any assistance!
