Inheritance question

[Gh24]

My father past and we sold his estate for $200,000 and $120,000 was left over after pay the mortgage off, title, lawyers etc. Does the estate need to pay tax on the sale of the home? Do I need to pay taxes on the money that I transfer to my bank account also? Thank you! 

[Anonymous_]

The mortgage does not factor into the equation.

The basis for the sale would be the fair market value on the date of your father's death. You would then subtract that figure from the sales price less your selling expenses to arrive at the total gain (or loss).

If the estate is paying any tax due, assuming a gain, then there would be no tax liability on your part when you transfer the proceeds out of the estate and into your bank account.

Note that the estate could also pass through any gain to you on a K-1 (1041).