Is there capital gains tax when wife inherits parents home held in family trust, not her primary residence, sells that home in same year and builds new home?

[ThomasM125]

On the day you take possession of the property, the cost basis is the fair market value of the property at that point in time. You would subtract that amount from the net sale proceeds to determine the gain on sale if any. If there was a gain, it would be a capital gain, long or short term depending on how long you held it. That gain may or may not be taxable once entered on your personal tax return, dependent on your other income and deductions. If you sold the property at a loss, the loss would not be deductible.