Inheriting a house does not mean that you automatically owe capital gains tax. In most cases, the home’s value at the owner’s death becomes the starting point for calculating your gain, which can reduce or eliminate tax on appreciation that occurred during the owner’s lifetime. Taxes may still apply if the property increases in value before you sell it, but several strategies can help limit the taxable gain.
A financial advisor can help you can help you calculate the potential tax bill on an inherited home and compare your options before you sell.
How Capital Gains Taxes Work on an Inherited House
Your cost basis is the amount used to calculate…
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