Inheriting a home around Savannah can be a good experience, yet bittersweet at the same time. You can find yourself inheriting a property that has value you can use to improve your life, but you mourn the loss of a loved one. If you inherited a house, you may find yourself wondering if you will pay taxes if you sell a house you inherited in Savannah Georgia?
How the tax basis is calculated
In order to determine how you’ll be taxed when you inherit a home, you need to understand how the tax basis is calculated. Regarding inheriting property, the “basis” refers to the asset cost for the purpose of the calculation of capital gains along with other taxes. To put that in simpler terms, when a person dies, the value (aka basis) of their property in Savannah 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 $32,000 but it was worth $115,000 at the time of their death, that property would be valued at $115,000 for the purpose of calculating capital gains.
Will you be taxed on gains/losses?
Capital gains or losses refer to your earnings from selling property that you use for either personal or investment purposes. Many common items are houses, furniture, vehicles, and many more things. If you decide to sell an inherited home in Savannah, that sale is regarded as capital gain or loss for the purpose of income tax. In most cases, you can qualify for lower, long-term capital gains if 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.
Do I need to report the sale of an inherited house to the IRS?
When you sell an inherited property, you have to report it for income 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. Keep in mind that we at Cash Homes Savannah are not tax professionals, we are real estate investors, so contact a local tax professional to get the best information about your specific situation.
Do I need to go through probate court to sell an inherited property?
When you inherit a home it can be stressful given that you are now responsible for a new property. This means that the maintenance and taxes now fall on your shoulders. The first thing you should do to sell a house you inherited is the go through the probate process in Savannah. The court will then authorize you to proceed with the sale. If inherited the house with other individuals, you should first agree with each other on the decision to sell. You can then file a petition requesting the court to allow you to sell the property. You can read more about the probate process in Savannah.
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 Cash Homes Savannah now at (912) 421-0714 to undertake a smooth and legitimate sale of your home. We are local here in Savannah Georgia 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 Savannah, then we would be happy to discuss it with you in more detail.
If you want to sell a house you inherited quickly, we can help!
Selling an inherited house can relieve you of quite a burden. You no longer have to worry about maintaining the property, trying to schedule open houses, keeping the house clean. In addition to that, selling the property to an investor is a basic simple, and fast process. Contact us for information on how to go about selling your home in Savannah and we will be glad to help you. We buy inherited houses around Savannah in any condition. You won’t have to make any repairs or pay any fees!