Help with inherited home

[psphillips]

Inherited brothers home, had to do required repairs for sale, do these reduce the final proceeds? or be deducted somewhere?  Also, have a negative capital gain, does this do anything with/for my taxes?

[MinhT]

When you inherit property, your cost basis for the property is its fair market value (FMV) at the time you inherited. The repairs required before the sale will add to that cost basis. To determine whether you have a capital gain or loss when you sell, you have to compare your cost basis with the net sale price (after selling expenses).

If you have a gain, it is taxed as capital gain.

If you have a loss, you can claim it as a capital loss if you did not use the property after you inherited it.

Edited 01.23.18  |  1:50 PM

[BobinCT]

[deleted]

[MinhT]

Thank you @BobinCT. I have edited my answer.

[BobinCT]

You're welcome. Obviously, this can be important!