[amsunshine]

My mom passed away in 2004. I am an only child and inherited everything, including the house, which I moved into temporarily during the time she was terminally ill as I cared for her. After she passed, I filed the will with the county, and my attorney filed an affadavit of heirship, since I did not want to go through probate. Within 6 months after her death, I sold my house (out of state) and moved into her house and have made that my primary residence ever since. I have since gotten married and the house is for sale. I will be moving to a different state to be with my spouse. The house is worth substantially less due to the crash in 2008. Do you know how the capital gains/losses thing will work with this sale since the house is worth so much less than when my mom passed in 2004?

[CliffARobinson]

Assuming you will be seeking professional tax assistance and not relying solely on internet research, I offer up this quote from intuit/turbotax:

When you inherit stock or other property, your basis is usually the value of the asset on the date of death of the previous owner. Assuming the asset had appreciated since the original owner purchased it, the basis is "stepped up" to current market value, so the income tax on any profit that built up while the previous owner was alive is forgiven. You are responsible only for the tax on appreciation after you inherit the stock. If the stock price falls before you sell it, you can claim a tax loss.

Quote source on inherited property and tax basis.