Will I need to pay taxes on property sold?

[Kmurry]

I inherited family land from my father when he passed away in 2020.  It was his estate until he passed.

My husband and I are planning to sell part of this property this year.  Do we need to pay taxes on what we sell it for?

[Vanessa A]

Possibly.  If you sell the property for more than your cost basis (which would be what he paid for it plus improvements he made) you would need to pay taxes on the profit.

If you sell it for less than his cost basis, then you would have a loss and not need to report it. 

[Kmurry]

This same property was given to my Dad several years ago by his Mom.

How does that work in reference to the cost of the land?

[Vanessa A]

It would still be his basis in the property.  His basis would be his mom's basis (what she paid plus improvements) plus improvements he made to the property.