I am currently selling my inherited home and after the stepped up basis at all costs associated with selling the house I will have an approximately $10,000 gain. The house will sell under a year from when I inherited it. Will this be considered a short term gain or a long term gain? I’m confused because I read some where that inherited homes are considered long term property even if sold within a year. Any information would be appreciated.
Long term
IRS Publication 559 page 14 - https://www.irs.gov/pub/irs-pdf/p559.pdf#page=14
Holding period. If you sell or dispose of inherited property that is a capital asset, the gain or loss is considered long-term, regardless of how long you held the property.
in Turbotax for date acquired there should be a drop down box that says inherited or type in inherited.
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@scocpm - all inherited assets are automatically considered 'long term' for capital gains tax purposes. THe one year holding period to get from short term to long term tax rates do not apply.
It's the same with stocks/ bonds, etc. example: Someone passes leaving you their XYZ stock. the very next day it 'shoots to the moon'. And on Day 2 you sell it all. You are taxed at long term rates; not short term rates.