Inheriting a home can be a great, yet bitter experience all at the same time. Inheriting a property is tremendously beneficial in the sense that you can use the value of the property to improve your life however you’d like, but you may still be mourning the loss of a loved one. Many people are put in this situation every day and a common question we always get asked is “what are the tax consequences when selling a house I inherited in Portland Oregon?” Fortunately, the tax laws are written in such a way that you won’t be overly burdened upon inheriting the property. There will be tax consequences, but not severe…which is good news for you.
Tax consequences when selling a house I inherited in Portland Oregon, what are they?
Calculation of basis
In order to understand how you’ll be taxed after 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 Portland is increased to the market value at the same time of their death. For example, 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 $100,000 amount for the purpose of calculating capital gains.
Taxations of gains/losses
Capital gains or losses refer to what you earn from selling property that you use for either personal or investment purposes. 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.
Reporting the sale
Upon selling an inherited home, you have to report it to the IRS 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 you have to take care of and pay taxes for at the same time. You should go through the probate process in Portland 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 Rubix Properties now at (503)597-8519 to undertake a smooth and legitimate sale of your home. We are local here in Portland Oregon 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 Portland Or, 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 Portland and we will be glad to help you.