Inheriting a home is a pretty sweet experience, yet bitter at the same time… You are sometimes left with a property from which, if you sell, you can use the money to improve your life. However, 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 Roanoke VA?” The tax laws have been designed in a way that will not add any more burden to you upon inheriting the property which is good news for you. 🙂
Tax Consequences when selling a house I inherited in Roanoke VA
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 Roanoke is increased to the market value as 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 refer to what you earn from selling property that you use for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in Roanoke, that sale is regarded as capital gain or loss for the purpose of income tax. In most cases, for you to qualify for lower rates of long-term capital gains, you are required to have held that property for at least a year. However long the duration you have been in ownership of an inherited home, any gain or loss will still be treated as long-term.
Reporting the sale
Upon selling an inherited home, you have to report it for the income tax purposes. You should first calculate your capital gain or loss. This is done by subtracting the basis from the sale amount. You should then report that amount to the necessary authorities.
Having an inherited home can be stressful given the fact that you have a new property to take care of and to pay taxes on at the same time… You should go through the probate process in Roanoke as the first step to selling your home. The court will then authorize you to proceed as you wish. If there are any other individuals involved in the inheritance, you should first agree with each other on that decision. You can then file a petition requesting the court to allow you to sell the property.
You should then consider how much tax you are to pay. This will be paid against the capital gains or losses resulting from the sale of the house. You can call Cross Properties, Inc. now at (540) 777-7000 to undertake a smooth and legitimate sale of your home. We are local here in Roanoke VA 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 Roanoke, then we would be happy to discuss it with you in more detail.
DISCLAIMER: While we do have a real estate broker in Virginia on our staff, we at Cross Properties, Inc. are not attorneys, CPAs, financial advisors, or tax experts. It is always best to consult competent professional advice prior to making any decisions with regard to a decedent’s estate, or disposing of any real estate.
Selling an inherited house can relieve you of quite a heavy burden. In addition to that, selling the property to an investor is a basic, simple, and fast process. Contact us for help on how to go about selling your inherited home in Roanoke and we will be glad to help you.