Usually, people have questions about inheriting a house. Some want to talk about the tax consequences of selling a Los Angeles Inherited house. The tax implications can seem confusing. Most people don’t know what they are going to do with an inherited house. Before you try to sell a house you’ve inherited, make sure you have the answers to your most important tax questions.
Tax Consequences of Selling a Los Angeles inherited House
Does the Home Sale Tax Exclusion Apply to Inherited Property?
Ordinarily, when you sell your home, the tax law gives you an exclusion of $250,000 (or $500,000 for married couples filing jointly). That means you don’t have to pay taxes on the first $250,000 (or $500,000) of profit you gain from the sale of the house.
However, when you sell inherited property, you don’t qualify for that tax exclusion. In order to qualify, you would have to live in the home for at least two years, using it as your primary residence.
So the short answer is no, you won’t qualify for the $250,000/$500,000 home sale tax exclusion.
What Are the Stepped-Up Basis Rules for Inherited Property?
You do qualify for a stepped-up basis. Under ordinary circumstances, the “basis” of a property is its cost or purchase price. But in the case of inherited property, the “stepped-up basis” is the fair market value at the time of the owner’s death.
That’s usually a higher number, which can work in your favor. When you sell the property, your taxable gain or loss will be determined by whether the sale price is higher or lower than the stepped-up basis.
For example, if you inherit a house that has an appraised value of $200,000, and you sell it for more than that amount, you will have a taxable gain. If you sell it for less than that amount, you will have a loss. That’s why you may want to sell the house before the house varies too much from the appraised value at the owner’s death.
If I Sell an Inherited Home, Can I Deduct a Capital Loss from My Taxes?
If you inherit a house and sell it for less than its fair market value, you are allowed to deduct the loss from your taxes. That can significantly reduce your tax burden.
However, only $3,000 of losses may be deducted from your income per year. Any additional losses must be carried over to future years.
Keep in mind that if you live in the house before you sell it, it becomes your personal residence, and different tax laws apply.
What is the Fastest Way to Sell an Inherited House
Try calling Coal to Cash Homebuyers, Inc. It is quick! You can sell house fast in Los Angeles normally in 30 days or less. That is much quicker than a traditional sale, even if there are no major items that need repair before closing. In most cases when an investor and a seller can agree on a price immediately, they can close as quickly as one to two weeks.
Coal to Cash Homebuyers, Inc. will buy as-is. Worrying about some repairs that you’ll need to fix based on an appraisal? An investor will estimate the repairs needed to restore your property and will purchase the property as-is.
No Fees! Coal to Cash Homebuyers, Inc. doesn’t charge you a real estate commission and may take care of any other nagging financial problems such as back taxes, code violations, or past due water and sewer bills.
Download FREE information on How to sell your house fast
Coal to Cash Homebuyers, Inc. will buy as-is.
An investor will estimate the repairs needed to restore your property, arrive at an offer, and will purchase the property as-is.
When we buy houses fast, there are no fees! We don’t charge you a real estate commission, and we may take care of any other nagging financial problems such as back taxes, code violations, or past due water and sewer bills.
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