WalkawayInherited house gain
Selling an inherited house: the gain, worked out
Your basis is generally the home's value on the date of death. Type it with your price and costs to see the gain on paper.
Type what you paid to start.
General information, not tax, legal or financial advice.
Selling costs are commissions, transfer tax and fees; the net sheet adds them up. Improvements add value or life to the home (a new roof, an addition); repairs do not count. Nothing you type leaves this page.
Gain worksheet
General information, not tax, legal or financial advice. This shows arithmetic only; it says nothing about what you owe. Take it to a tax preparer.
The gain, worked out
The home was worth $410,000 on the date of death. You sell it for $450,000 and pay $27,000 in selling costs.
- Amount realized: $450,000 less $27,000 = $423,000.
- Less the $410,000 value at death: a gain on paper of $13,000.
What the person who died paid does not enter the sum. The rules for inherited property's basis are in IRS Publication 551, Basis of Assets; the home sale rules are in Publication 523.
What sellers ask next
What is my basis in an inherited house?
Generally the home's fair market value on the date of death, not what the person who died paid for it. In some estates an alternate valuation date applies. IRS Publication 551 sets out the rules.
Do I pay capital gains tax when I sell an inherited house?
The gain is measured from your basis, so a sale soon after the death often shows a small gain or none. Whether tax is due depends on your whole return; take this worksheet to a tax preparer.
How do I find the value on the date of death?
From an appraisal made for the estate, the estate's tax return if one was filed, or a later appraisal dated back to that day. Keep it with your records.
Can I use the $250,000 home sale exclusion?
Only if the home qualifies as your own main home under the IRS's ownership and use tests. Publication 523 sets out the tests.
Do improvements after the death count?
Improvements you or the estate made after the death add to the basis. Enter them above; repairs do not count.
General information, not tax, legal or financial advice.
Related
The rest of the seller's kit
- What you walk away withEvery cost of selling, line by line, and the money left at closing.
- What selling costsCommissions, transfer tax, title and credits, as dollars and a share of your price.
- Both agents' commissionsListing and buyer's agent as separate lines, and what every split costs.
- The gain on your salePrice less selling costs, what you paid and improvements, with the IRS's own figures.