When you think about it, the idea of inheriting a home in Utica can be sweet! However, it can be extremely burdensome at the same time. Although you now have a piece of property that may have significant value behind it, you still are burdened with the grief of mourning the lose of a family member. So you may tend to ask yourself at this point “what are the tax consequences when selling a house I inherited in Utica NY?” The tax laws have been designed in a way they will not add any more burden unto you upon inheriting the property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you. 🙂
Tax Consequences when selling a house I inherited in Utica, NY
Calculation of basis
In order to comprehend how you’ll be taxed 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 Utica is increased to the market value as at the time of their death. For instance, 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 latter amount for the purpose of calculating capital gains.
Taxation of gains/losses
Capital gains or losses refer to what you earn from selling property that you use for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in Utica, that sale is regarded as capital gain or loss for the purpose of income tax. 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
One of the most important things you must do after selling an inherited home in Utica is report the sale for income tax purposes! In order to calculate this correctly, you must first know your basis. You will then report the difference between the sale price and the basis price as either your realized gains, or loss. If the sale price was higher than the basis, you made money and must report it for taxes. If your sale price was lower than the basis, you realized a loss, and can now use that as a tax write-off.
Having an inherited home in Utica can be stressing given the fact that you have new property to take care of and pay taxes for it at the same time… You should go through the probate process in Utica 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 Fast Cash Home Buyers now at (315) 351-2772 to undertake a smooth and legitimate sale of your home. We are local here in Utica NY 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 Utica, then we would be happy to discuss it with you in more detail.
Selling an inherited house in Utica 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 Utica and we will be glad to help you.
P.S. – You can always visit Oneida County’s Finance Department website. They should be able to answer all of your real estate tax related questions!