Perhaps. You sold an asset and may have incurred capital gains. Whether or not that’s the case depends on when your father died and how much the house was worth then.
If he died recently and the fair market value was $750,000 at the time, there was no gain and you owe no taxes. But, for example, if your father died a while ago and the house was worth $600,000 at the time, then the tax basis in your one-third share was $200,000. If you then sold it for $250,000, then you would need to report $50,000 of gain.
To get a better understanding of capital gains taxes and how they work, check out the following articles:
- Do You Pay Capital Gains Taxes on Property You Inherit?
- Giving Your Home to Your Children Can Have Tax Consequences
- What Is Cost Basis and How Do You Prove It?
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.
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