Inheriting two homes

[wrenal]

My sister and I inherited two homes after my mother passed.  While my mom was living she did a reverse mortgage on the home she lived in with my sister.  Now we must sell the second home to pay off the loan on the first one. The second one is free and clear and valued somewhere in the 700 to 750 range.  We owe 295 on the primary home.  Can we avoid capital gain tax since we came into the home as a result of death?  If not what is the capital tax percent.

[tagteam · Accepted solution]

---

@wrenal wrote:

Can we avoid capital gain tax since we came into the home as a result of death?

---

Yes, generally, because your basis in the property is stepped up to the fair market value (FMV) of the property on the date of the decedent's death. 

See https://www.irs.gov/faqs/interest-dividends-other-types-of-income/gifts-inheritances/gifts-inheritan...