I'm dealing with a situation and need some guidance.
capital gains on inherited property. I've been dealing with this for about 14 weeks now and the situation isn't improving.
I have already done some research online but got conflicting advice.
What are the risks if I pursue this? What's the likely timeline?
Just want to point out — the statute of limitations might be a factor here. In some states it's as short as 1-2 years. Don't sit on this too long.
Have you tried reaching out to your state's consumer protection office? They sometimes have free resources or mediation services.
My mother passed away and I inherited her house (purchased in 1985 for $80K, current FMV at death was $650K). I'm selling it for $680K. Do I owe capital gains tax on the full $600K appreciation or just the $30K since I inherited it?
You get a stepped-up basis under IRC § 1014. Your basis in the property is the fair market value at the date of your mother's death ($650K), NOT her original purchase price. So your taxable gain is only $680K - $650K = $30K. This is one of the most valuable provisions in the tax code for inherited assets. Make sure you document the FMV at date of death with an appraisal — the IRS can challenge basis if not properly documented. Also check whether your state conforms to the federal stepped-up basis rules (most do, but a few states have their own estate/inheritance tax rules).
Make sure you're not missing any deductions. Many people leave money on the table.