Tax Consequences When Selling A House I Inherited in San Antonio

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. Many people ask themselves “what are the tax consequences when selling a house I inherited in San Antonio, Texas?” The tax laws have been designed in a way that will not add any more burden to you upon inheriting the property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you. 🙂

tax consequences when selling your San Antonio house in you inherited

Tax Consequences when selling a house I inherited in San Antonio, Texas

Calculation of Basis

In order to comprehend how you’ll be taxed having inherited a home, you need to know how the basis is calculated. Basis, in this case, refers to the asset cost for the purpose of the calculation of capital gains along with other taxes.

Inherited properties are subject to a stepped-up basis. This means when you inherit a property, your basis is the amount the property is worth the day the person dies, not the day the person bought the property.

When a person dies, the value or basis of their property in San Antonio is increased to the market value as at the time of their death. Here’s how it is different than if you buy it and then you sell it.

If a person purchased a home 20 years ago for $15,000 and later sold that property for $65,000, then they would have to pay capital gains on $50,000.

But if you inherit a property worth $65,000 and sell it for $65,000, then you will not have to pay capital gains. If you choose to wait and sell the property later, you will have to pay more taxes if the value of the property goes up.

Taxation of Gains/Losses

Capital gains or losses refer to what you earn from selling property that you use for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in San Antonio, that sale is regarded as capital gain or loss(based on the basis: see above) for the purpose of income tax.

In most cases, for you to qualify for lower rates of long-term capital gains, you are required to have held that property for at least a year. However long the duration you have been in ownership of an inherited home, any gain or loss will still be treated as long-term.

Home Sale Tax Exclusion

Inherited homes do not qualify for the $25,000/$500,000 home tax sale exclusion. TO qualify for this exclusion, the property has to have been your main residence for a certain period of time.

Good news…you may not need this exclusion because of the stepped-up basis that you received for your inherited property.

Reporting the Sale

Inherited-House-Tax
Inherited Property Tax

Upon selling an inherited home, you have to report it for the income tax purposes. The IRS requires that you report the sale of an inherited property whether you make money or not.

You should first calculate your capital gain or loss. This is done by subtracting the basis from the sale amount. You should then report that amount to the necessary authorities.

Having an inherited home can be stressing given the fact that you have new property to take care of and pay taxes for it at the same time… You should go through the probate process in San Antonio if the house is to be transferred through a will, 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.

If there is no will, then you can contact someone with experience in inherited properties to find out what you need to do to sell the property.

You should then consider how much tax you are to pay. This will be paid against the capital gains or losses resulting from the sale of the house.

You can call Sell My San Antonio House now at (210) 201-6644 to undertake a smooth and legitimate sale of your home. We are local here in San Antonio Texas and we know the market here better than anyone else. If you are still asking yourself what are the tax consequences when selling a house I inherited in San Antonio, then we would be happy to discuss it with you in more detail.

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 on how to go about things when selling your home in San Antonio and we will be glad to help you.

We hope you have found this article helpful and informative. We are not accountants or tax professionals so we always recommend that you contact a certified tax professional to answer any questions that you have.

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