Deciding what to do with an inherited house

Personal Finance


At that point, it might be easier to weigh the pros and cons of your options.

For starters, it’s important to know that for tax purposes, Uncle Sam treats an inherited house as an asset similar to, say, inherited stock.

As such, you get a tax benefit: When you go to sell the house — whether immediately or years in the future — any capital gains are based on what’s called the “stepped-up” cost basis — i.e., the fair-market value at the time of your parent’s death — not their original purchase price.

For instance, if your mom paid $100,000 for her house in 1980 and its fair-market value at her death in 2017 is $350,000, only the difference between that updated amount (the new cost basis) and the sale price would be considered a long-term capital gain.

Right now, rates on those gains can range from as high as 20 percent for higher-income taxpayers to zero percent for lower-income taxpayers. (See chart)



Source link

Products You May Like

Articles You May Like

Coca-Cola (KO) Q1 2021 earnings beat Street estimates
Johnson & Johnson JNJ earnings Q1 2021 beat estimates
United Airlines (UAL) results 1Q21
Chipotle Mexican Grill (CMG) Q1 2021 earnings beat
Unintentional real estate flippers are raking in surprising profits

Leave a Reply

Your email address will not be published. Required fields are marked *