We have inheritated a house after my wife's aunt passed away she still owes around 32000 dollars on a home equity loan. The tax value is 60000 if we sell the house for 70000 do we owe taxes on what is over tax value or do we owe any taxes at all

When you sell the home, the home equity loan will have to be paid off; no tax issues there.

The basis for the house is the Fair Market Value at the time of death of your wife's aunt. It is likely that, once you sell the house and factor in all of the costs of the sale, you will probably show a small loss.

That loss is NOT deductible, but at least no taxes will be paid on the sale.

We have inheritated a house after my wifes aunt passed away she still owes around 32000 dollars on a home equity loan. The tax value is 60000 if we sell the house for 70000 do we owe taxes on waht is over tax value or do we owe any taxes at all

First you don't actually inherit the house until the executor has taken care of paying off the aunt's debts, including the home equity loan. It may be that the best way to do this is for the executor to sell the house out of the estate and pay off the loan. In this case the estate may owe tax due on the capital gain of the house, meaning the difference between proceeds of the sale and the aunt's original cost basis (the amount she paid for the house, plus costs of capital improvement she may have made over the years). It may be that the property qualifies for an exclusion of up to $250K on capital gains tax, if the aunt used the property as her principal residence for at least 2 of the previous 5 years, so perhaps the estate would owe no capital gains tax at all. Alternatively if the executor distributes the property to the heirs and then the heirs sell it, their cost basis is set equal to the fair market value (FMV) at the time of the aunt's death. In all likelihood there would be little or perhap even no capital gain for them to report and pay taxes on if they sell the house right away. You mentioned that the house's tax value is $60K - since the assessed value may not be the true FMV the executor should arrange to have the house appraised to set the FMV figure.