Inheriting a home is a pretty sweet experience, yet bitter at the same time… You are left with great property value you can use to improve your life, but you are still mourning the loss of a loved one. So you may tend to ask yourself at this point “what are the tax consequences when selling a house I inherited in Salt Lake City, Utah?” These tax laws are designed so they won’t add any more burden on you when you get an inherit a 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 Salt Lake City, Utah
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 Salt Lake City 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 is what you earn from the sell of the house that you use for either personal or as investment. Such can be houses, furniture and many more things. If you decide to sell an inherited home in Salt Lake City, 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
Upon selling an inherited home, you have to report it as income for 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.
When you inherited home, this can add stress because you now will have a new property that needs to be taken care of and you will have to pay property taxes at the same time… You should go through the probate process in Salt Lake City as the first step to selling your home. The court will then authorize you to proceed as you wish. Make sure everyone that is involved in the inheritance is in agreement to sell the house. You can then file a petition to the court requesting them 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 YourPriceMyTerms.com now at (801) 441-2800 to undertake a smooth and legitimate sale of your home. We are local here in Salt Lake City ,Utah 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 Salt Lake City, then we would be happy to discuss it with you in more detail.
Selling an inherited house may cause an added burden. In addition to that, selling the property to an investor is simple and a very fast process. Contact us for inquiries on how to go about things when selling your home in Salt Lake City and we will be glad to help you.