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connieavery · Feb 13, 2007, 11:27 AM

My father passed away June 06, his house was in his and my name with right of survialship. The house was sold in 2006 for 250,000.00. Do I pay capital gain and/or inherited tax? If so, what is the percent that will have to be paid?

ScottGem · Feb 13, 2007, 11:29 AM

Did you live in the house as your primary residence?

connieavery · Feb 13, 2007, 11:33 AM

No, I did not live in this house

AtlantaTaxExpert · Feb 13, 2007, 11:40 AM

Even though you had right of survivorship, the house was STILL part of your father's estate.

when he died, the basis for the house was stepped up to the Fair Market Value (FMV) at the time of your father's death.

Hence, when the estate sold it, it would only pay capital gains taxes on the difference between the sales price and the combination of the stepped-up FMV and the costs of the sale. It's likely that the estate will owe ZERO taxes. The estate STILL have to report the sale, however, on a ficuciary tax return (Form 1041).

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