This is the 2nd in a series of six articles about selling a house in probate. Inheriting a home is a pretty sweet experience, yet bitter at the same time. You are left with great property value you can use to improve your life, but you are still mourning the loss of a loved one. So you may tend to ask yourself at this point “what are the tax consequences when selling a house I inherited in Brevard County Florida?” The tax laws have been designed in a way in which they will not add any more burden unto you upon inheriting the property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you. 🙂
Tax Consequences when selling a house I inherited in Brevard County, Florida
Calculation of basis
In order to comprehend how you’ll be taxed having inherited a home, you need to know how basis is calculated. Basis, in this case, refers to the asset cost for purpose of the calculation of capital gains along other taxes. When a person dies, the value or basis of their property in Brevard County is increased to the market value at the time of their death. For instance, if a person purchased a home 20 years ago for $25,000 but it was worth $100,000 at the time of their death, that property would be valued at the latter amount for the purpose of calculating capital gains.
Taxation of gains/losses
Capital gains or losses refers to what you earn from selling property that you use for either personal or investment purposes. It can include houses, furniture and many more things. If you decide to sell an inherited home in Brevard County, that sale is regarded as capital gain or loss for the purpose of income tax. Normally for you to qualify for lower rates of long-term capital gains, you would have to hold the property for at least a year. However, in ownership of an inherited home, any gain or loss will still be treated as long-term no matter how long you’ve had the home.
Reporting the sale
Upon selling an inherited home, you’ll need to report it for the income tax purposes. We advise consulting a tax expert (accountant or CPA) who can update you on any tax changes and help you calculate your capital gain or loss. Essentially, your liability is calculated by subtracting the basis from the sale amount. which in turn is reported to the IRS using Schedule D.
Having an inherited home can be stressful. Not only do you have new property to take care of, but you need to pay taxes for it at the same time. The probate process in Brevard County is the first step to selling the home. The executor or court appointed administrator will lead the selling process. You can then file a petition requesting the court to allow you to sell the property. If all heirs agree, then the sale can proceed without going through a court hearing.
The taxes will be paid against the capital gains or losses resulting from the sale of the house. You can call House Beagle now at (321) 549-8686 to undertake a smooth and legitimate sale of your home. We are local here in Brevard County Florida and we know the market here better than anyone else. If you are still asking yourself what are the tax consequences when selling a house I inherited in Brevard County, then we would be happy to discuss it with you in more detail.
Selling an inherited house can be quite a burden. Selling the property to an investor is a basic simple and fast process. Contact us for inquiries on how to go about things when selling your home in Brevard County and we will be glad to help you.