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Level 1

We want to sell a second home that my wife inherited 9 years ago. How will the proceeds be taxed?

 
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Level 20

We want to sell a second home that my wife inherited 9 years ago. How will the proceeds be taxed?

Any gains on the sale of the second home will be taxed as long term capital gains. 

Gain or Loss equals Sales Price minus Sales Expenses minus Adjusted Basis

Level 20

We want to sell a second home that my wife inherited 9 years ago. How will the proceeds be taxed?

Your cost basis for calculating capital gains is the Fair market value (FMV) on the date of death of the person she inherited it from (plus any improvements, but not repairs, that were made since inheriting it).

 

If the property was used as rental property, anytime in last nine years, you will also have "depreciation recapture" (a special class of capital gain taxed as ordinary income, but not more than 25%).