I was notified I was inheriting property in the Seattle area, a total of 5 lots. The value estimates so far are between 800k and 1.5 million. There are no mortages owned on any of these and these properties are only a portion of all properties that were distributed among many heirs. I don't live anywhere close to these properties and plan to sell them as I won't be able to manage them. My question is when should I sell them to help with taxes and what type of taxes will I pay after selling inherited property? Is the tax as income tax and is the total amount taxed? Is it short/long term capital gains etc. As I understand it, Washington state did away with inheritance tax and replaced it basically with an estate tax. When it comes to state taxes, I would pay Washington state instead of my home state correct?

The impact on your income taxes when you sell will be minimal if you sell anytime in the next year or so. The basis of the property was stepped-up to the Fair Market Value at the time of the owner's death. If you sell shortly, the gain in the property's value probably will not even cover the costs of the sale. You may actually show a paper loss.

Any inheritance or estate taxes are paid by the estate, NOT the heirs.

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Originally Posted by AtlantaTaxExpert

The impact on your income taxes when you sell will be minimal if you sell anytime in the next year or so. The basis of the property was stepped-up to the Fair Market Value at the time of the owner's death. If you sell shortly, the gain in the property's value probably will not even cover the costs of the sale. You may actually show a paper loss.

Any inheritance or estate taxes are paid by the estate, NOT the heirs.

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Thank you for the help, it's much appreciated. I've heard so many things about different tax rates and the like and it's been so confusing to try and even get a ball park figure of what will have to be paid and what will actually be net income from everything.

Glad to help!