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Inherited in 1992 |
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I inherited my parents house in 1992. Due to heavy work load for me and the confusion of closing the estate I neglected to have the property appraised. I am now considering selling the property and wonder about the taxes I will have to pay. This is currently not my primary resident but could be in 2 years. Then sell. |
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No problem. Any real estate appraiser can give you a simple one-page estimate of the value of the property at the time you inherited it, or even up to six months after that. The figure they come up with is your cost basis for the place. You would owe capital gains tax only on the profit above that amount.
What's happened in the past five years I don't know -- if you've been renting it out, your cost basis will have changed and an accountant can explain. If you've made any improvments, your cost basis will be higher.
As you realize, you could sell and use the federal homeseller's exclusion on profit after you'd made the place your own residence for at least two years. But if your taxable gain wouldn't be very high, once you figure by subtracting your cost basis and some other expenses from the sale price, you may not have to wait just because of income tax considerations. You'd be free to sell whenever you want. |
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Edith
Originally published on November 14, 2007 |
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