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Tax Consequences for Sale of Inherited House
My wife was willed a house upon the death of her parents. The county valued the house at 142,000 at time of probate. The house was sold for a net of 115,000 after all fees.
What are the tax consequences? Thank you. |
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Meaning the house was sold for over $250K? In that case, the $142K is the cost basis and any profit over that is taxable income. I believe its taxed as Capital Gains, but I moved this to the Tax forum so one of our great tax gurus can give a more definitive answer.
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If the house was sold for 115, a loss was incurred. If your wife intended to use the property for personal purposes, the loss would be non-deductible. On the other hand, if your wife intended to hold the property for investment purposes, the loss would be a capital loss and would be deductible, subject to certain limitations (generally a max. of 3K per year).
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