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Capital Gains

Pat M
Level 1

Client along w two other siblings rec'd their dad's house in an inheritance threes ago after his passing. FMV of the house was $300K when they took possession 3 yrs. ago.

They recently sold the house for approximately $25k profit each after selling expenses. Do they have to pay capital gains on their portion and gain, or is it exempt as part of the inheritance? I have rec'd conflicting advise from other sources???  Help.

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3 Replies 3
sjrcpa
Level 15

An inheritance is not taxable income.

Gain on property you inherited is taxable income.


ex-AllStar
Just-Lisa-Now-
Level 15
Level 15
they pay tax on the gain.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
BobKamman
Level 13

Gotta love those anonymous sources.  Has the house been vacant for three years?  Was one or more of them living in it is since then?  The primary-residence exclusion might apply.  Was it rented?  The gain might be more than they think, after depreciation.  

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