I've been trying to resolve this on my own but I'm stuck.
capital gains on inherited property. I've been dealing with this for about 2 weeks now and the situation isn't improving.
I have already tried to resolve this directly but did not get a clear answer.
What are the risks if I pursue this? What's the likely timeline?
Not a lawyer, but I have direct experience with this.
What worked for me was having everything documented. It took 3-6 months but was worth it.
This happened to me too. Have you tried filing a complaint with the relevant agency? In my case they investigated and it got resolved without needing a lawyer.
Enrolled Agent here -- I deal with inherited property capital gains issues almost weekly during tax season. The single most important concept is the stepped-up basis under IRC Section 1014.
When you inherit property, your cost basis is stepped up to fair market value on the date of death (or the alternate valuation date under IRC 2032). This means:
If you are being audited, gather the death certificate, probate documents, and get a retrospective appraisal from a certified appraiser. Most can do a retroactive valuation for $300-500. This is money well spent compared to the tax liability you might face without documentation.