Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
Nickie007
New Member

Taxes on the sale of a second (inherited) home

If a home is inherited, making it your second home, then sold either within a year or after a year, how would capital gains tax work and would it make a difference if that second (inherited) home was to become the primary residence?

1 Best answer

Accepted Solutions
tagteam
Level 15

Taxes on the sale of a second (inherited) home

Your basis for inherited property would generally be the fair market value on the date of the decedent's death and your capital gain would be the difference between that basis and your selling price (i.e., if you sold it for more than your basis you would have a capital gain).

 

Regardless of how long you held the property, any gain would be long-term since the holding period for property acquired via inheritance is automatically long-term (i.e., long-term capital gain tax rates apply).


If you made the home your primary residence, you could exclude gain on the sale of $250,000 ($500,000 if married filing jointly) provided you owned and used the home as your primary residence for at least two out of the past five years leading up to the sale.

 

https://www.irs.gov/publications/p523#en_US_2019_publink10008938

View solution in original post

2 Replies
tagteam
Level 15

Taxes on the sale of a second (inherited) home

Your basis for inherited property would generally be the fair market value on the date of the decedent's death and your capital gain would be the difference between that basis and your selling price (i.e., if you sold it for more than your basis you would have a capital gain).

 

Regardless of how long you held the property, any gain would be long-term since the holding period for property acquired via inheritance is automatically long-term (i.e., long-term capital gain tax rates apply).


If you made the home your primary residence, you could exclude gain on the sale of $250,000 ($500,000 if married filing jointly) provided you owned and used the home as your primary residence for at least two out of the past five years leading up to the sale.

 

https://www.irs.gov/publications/p523#en_US_2019_publink10008938

View solution in original post

Nickie0071
New Member

Taxes on the sale of a second (inherited) home

Thank you

Dynamic AdsDynamic Ads
Privacy Settings
v