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You pay capital gains tax on any gain (profit) you made on the sale, meaning the difference between the sales proceeds you received (after expenses) and your cost basis. For inherited property your cost basis is equal to the fair market value (FMV) of the property as of the date of death of the decedant, plus the cost of any capital improvements you may have made after that. The executor of the estate should be able to provide you with the FMV data. If this property was your principal residence for at least 2 of the past 5 years you may qualify for an exclusion from federal tax on some or all of the gain -post back if this is the case and we can provide more details about that.
If you took a loss on the sale (sales proceeds are less than cost basis) you can't take the loss off your taxes, as losses on personal property are not reportable. The rules are a bit different if this was business property (a farm perhaps, or rental property) - again post back if you need more details. |
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