When you inherite a home it can be heartbrteaking, you just lost a loved one and at the same time you are left with a house or houses that was owned by the person who just left us. The great value of Real Estate that was left behind can be used to greatly improve your life, but still mourning the loss of a loved one. After taking the time to mourn the loss of your loved one you may start asking yourself at this point “what are the tax consequences when selling an inherited house in Spokane Washington?” Tax laws have been written so they dont add any extra burdens on 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 a house I inherited in Spokane, Washington
Calculation of basis
To figure out how you will be taxed when you are inherhiting a home, you will need to know how basis is calculated. Basis, in this case, refers to the asset cost for purpose of the calculation of capital gains along other taxes. When a person passes away, the value of their property in Spokane will be increased to the fair 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 that you use for either personal or investment purposes. This can be real estate, furnature and much more, that sale is regarded as capital gain or loss for the purpose of income tax.In many cases, for you to qualify for the lower rates of these long term gains you will be required to have held the asset for at least a year. However long you have owned the inherited home, gains and losses will be treated as long term.
Reporting the sale
When you sell an inherited home, you will have to report it for tax purposes. The first thing that should happen is to calculate your capital gain or loss. This would be done by subtracting the basis from the sale amount. Then you should report that to the IRS.
Owning an inherited home can be a little stressful due to the fact that you now own a property that you now have to maintain and pay property taxes on. You should go through the probate process in Spokane as the first step to selling the home. After this process is finalized the court will then authorize you to proceed with the sale of the house. If there are more people who are involved in the inheritace such as family or friends, you should all agree before proceeding. You can then file a petition requesting the court to allow you to sell the property.
Take in consideration how much tax you will be paying. This will be paid against the capital gains or the losses from the sale of the asset. You can now call All American Home Repair 1776 now at 1-509-596-1182 to make sure you have a smooth transition on the sale of the home. We are local investors here in Spokane Washington and we do know the market. If you are still asking yourself what are the tax consequences when selling a house I inherited in Spokane, 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 Spokane and we will be glad to help you.