Q. Will I have to pay taxes on the proceeds of the sale?
A. You will not have to pay tax on the gross sale amount or the "proceeds" (net cash received). What you will pay tax on is the capital gain realized from the sale.
The capital gain is the difference between net sale amount and your "cost basis". Cost basis is usual what you invested in (paid for) the property. But, in the case of inherited property, your cost basis is the fair market value on the date of death of the decedent.
So, for example, you sold it for $200,000 and it was worth $120,000 in 1995, you have a taxable gain of $80,000. Long term capital gains are taxed at special low rates. Some of it could actually be "taxed" at 0%.
