Inheriting a home in Texas is a pretty sweet experience, yet bitter at the same time… You are left with some great property value you can use to improve your families 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 Weatherford TX?” The tax laws have been designed in such a way they will not add any more burden unto 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. 🙂
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Tax Consequences When Selling a House I Inherited in Weatherford TX
Calculation of basis
In order to comprehend how you’ll be taxed having inherited a home, you 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 dies, the value or basis of their property in Weatherford is increased to the market value as 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.
Depending upon the value of the decedent’s property, a will may be necessary to avoid, minimize, or defer federal estate and state inheritance taxes. These taxes generally are imposed if the value of the decedent’s property exceeds the limitation imposed by the law at the time of the decedent’s death, reduced by the amount of any lifetime taxable gifts. The limits imposed by law vary, so it is important that you check with an attorney to determine if an estate is taxable. When determining if an estate is taxable, it is important to look at the value of the decedent’s property. For these purposes, the decedent’s property includes his or her separate property and one-half of all community property. Life insurance and other non-probate assets are considered in determining the value of the decedent’s property unless certain steps were taken during life to prevent such assets from being subject to estate tax at death (e.g., placing life insurance in a trust).
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 Weatherford, that sale is regarded as capital gain or loss for the purpose of income tax. In most cases, tax consequences when selling an inherited house for you to qualify for lower rates of long-term capital gains, you are required to have held that property for more than one year. However, the duration you have been in ownership of an inherited home, 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 income tax purposes. 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 Weatherford 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. This will be paid against the capital gains or losses resulting from the sale of the house. You can call Tim The House Buyer now at (817) 550-5069 to undertake a smooth and legitimate sale of your home. We are local here in Weatherford TX 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 Weatherford, then we would be happy to discuss it with you in more detail.
You can learn more about all aspects of the Probate process in Texas here.
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 Weatherford and we will be glad to help you.
We’ll evaluate your house, make you a fair “all-cash” offer, and you can decide if selling your house to us is the best fit for you. We’re here for you, just reach out and lets chat.
TMC Property Solutions buys houses “as-is“, and we pay cash in as little as just 5-7 days. Give us a call now 24/7 at (817) 550-5069 or fill out the short form over here.
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