Hi,
I’m selling my property in Bulgaria which was inherited from my father in 2004 and I want to buy a rental property here in the US with the money. However my father died last year and I read on the IRS that I only have to pay capital gains tax on the value of the property at the time of his death, instead of the 2004 value when he transferred me the property. The difference is huge because in 2004 the property was valued at $10,000 and last year it was valued at $220,000 which means that I won’t even have to pay capital gains tax because the value hasn’t changed much since last year. Please let me know if that’s how it works, as I already have an offer and I need to decide in the next day or so! Thank you.
Here is the article link and what it specifically says:
https://www.irs.gov/publications/p523#en_US_2019_publink10008937
Home acquired from a decedent who died before or after 2010.
If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. If a federal estate tax return didn’t have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes.
