When you inherit a home, your tax basis is its value at death, not what the original owner paid. If you inherited a California house appraised at $310,000 in 2017 and sell it for $620,000, you owe capital gains tax on roughly $310,000, minus selling costs and any depreciation you claimed as a rental.
Chapters
I, along with my siblings, inherited a home in California in 2017. The appraisal for the home is $310,000 and is worth 620k. Now I'm having a problem figuring out the capital gains we would owe.
Sometimes an appraisal is not what the property is really worth. Was it a county appraisal for property tax? They're never going to be accurate. But if it was a legit appraisal of 310 in 2017, then your basis starts then. So your family inherited the property in 2017, your basis is 310. Now it's worth 600, let's say 610. So let's say you were able to find someone that buys it 10 grand in selling costs, whatever. Let's just say you net 300 grand, whatever. You've got a capital gain between 610 minus any selling costs and 310, that's going to be your gain. But if you depreciated the property as a rental property, then you're going to reduce the basis further. So it could be 310, it could go down to 290, 280. I don't know if you've done depreciation, but your gain is going to be between the basis of when you inherited it minus any depreciation, and then the gain minus any selling costs. That's going to be your gain. And you're going to divide it amongst your siblings or whoever owns that property with you.
