Is the money received from the sale of inherited property taxable???

Q. Is the money received from the sale of inherited property taxable?

A. Simple answer: No. An inheritance is not taxable.

But taxes aren't simple. When inherited property is sold, you only pay income tax on the capital gain ( profit), not the whole sale price.

Sales of real estate are usually reportable on your tax return, especially if a form 1099-S is issued. There will most likely be no capital gain and therefore no tax. Any capital gain would be on the difference between what the house was worth on the date of the decedent's death (your "cost basis") and what the house sold for.

If the house was "investment property", and sat vacant between the time you inherited it and sold it, you can deduct a loss. If you (or other relatives) used the property for personal use, a loss is not deductible.