My Uncle's Estate house sold in Virginia, I received proceeds from the sale. I live in Maryland, will I need to pay taxes on my proceeds?

[Critter]

Maybe ... contact the executor of the estate to see if you will get a K-1 from the estate tax return and how much will be taxable if anything.

[Hal_Al · Accepted solution]

Simple answer: no. An inheritance is not taxable.

But, the sale of the house may have resulted in a capital gain. If it did, the executor will send you a Schedule K-1 to report your share of the gain.

The cost basis of inherited property "steps up" to the market value on the date of death. So, it's possible that a capital loss was realized on the sale. The K-1 could report a deductible loss, rather than a gain.