Inheriting a home is a pretty sweet experience, yet bitter at the same time. You are left with great property value you can use to improve your life, but you are still mourning the loss of a loved one. So you may tend to ask yourself at this point “what are the tax consequences when selling a house I inherited in Clovis CA?”. Tax laws have been designed, not to add any more burden upon inheriting a property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you. 🙂
Calculation of basis
You need to know how basis is calculated in order to comprehend how you’ll be taxed. Basis, in this case, refers to the asset cost for purpose of the calculation of capital gains along other taxes. The value or basis of their property in Clovis is increased to the market value at the time of their death. For instance, if a person purchased a home 20 years ago for $25,000 but it was worth $100,000 at the time of their death, that property would be valued at the latter amount for the purpose of calculating capital gains.
Taxation of gains/losses
Capital gains or losses refer to what you earn from selling property used for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in Clovis, that sale is regarded as capital gain or loss for the purpose of income tax. You are required to have held that property for at least a year to qualify for lower rates of long-term capital gains. However long the duration is, any gain or loss will still be treated as long-term.
Reporting the sale
Upon selling an inherited home, you have to report it for the income tax purposes. You should first calculate your capital gain or loss by subtracting the basis from the sale amount. You should then report that amount to the necessary authorities.
An inherited home can be stressful, having a new property to take care of and to pay taxes for. You should go through the probate process in Clovis as the first step to selling your home. The court will then authorize you to proceed as you wish. If there are any other individuals involved in the inheritance, you should first agree with each other on that decision. You can then file a petition requesting the court to allow you to sell the property.
You should then consider how much tax you are to pay. Since, this will be paid against the capital gains or losses resulting from the sale of the house. You can call Central Valley House Buyer now at (559) 554-2230 to undertake a smooth and legitimate sale of your home. We are local here in Clovis CA and we know the market here better than anyone else. We would be happy to discuss in more detail the tax consequences when selling a house I inherited in Clovis.
Selling an inherited house can relieve you of quite a burden. In addition to that, selling the property to an investor is a basic simple and fast process. Contact us for inquiries when selling your home in Clovis and we will be glad to help you.