Can I spread income taxes out over several years because of a large unexpected capital gains (inheritance) for 2017?

[IsabellaG · Accepted solution]

No, you have to report your income in the year that you receive it. Years ago, there was a tax calculation called Income Averaging, but that is no longer an option.

But if you inherited property you don't pay tax on that. For instance, if you inherited a home because a relative died and left it to you in 2017, you don't report tax on that. If you turn around and sell the house, you have to report the sale, but your cost basis in the property is the Fair Market Value on the date of death. So if you sold the house shortly after you inherited it, chances are you didn't have a taxable gain, or at least not much of one. 

[Fred2021]

If I sell a property with a large income can this be spread out over the current year and the previous 2 years?

[WendyN2]

No, as capital gains cannot be carried back for Individual taxpayers. However, you state that this was an inheritance in the title section of your question. I am assuming that you merely used the same title that was there, but just in case this IS in fact an inheritance, you only recognize gains based on the adjusted basis of the property, which is the FMV of the property at date of inheritance.