Question

Capital Gains Taxes

Forum|Forum|2 years ago
October 25, 2023
1 reply
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Home was purchased in 1997 for 75,000 and was passed down via deed officially in 2019. I have lived there on my own( solely responsible for all bills including taxes since 2016 however) If I were to sell it for 750,000, how much would I have to pay in taxes?

Ask the Experts - Extension - Sept 2023

J

JandKit

Hi CY110,

It sounds like a very nice investment on this sale. You mentioned that it was received or passed to you via deed.

If the home was passed to you directly through a death, it is possible that the property, in your hands, would have the save basis as that of the previous owner. This concept is know as 'stepped up basis'. If that is your case, then you would want to know what was the appraised value of the property at the point at which you received it. This value, becomes your value, in 1999.

If that is your situation, The value in 1999 plus any improvements made by you since that time would increase your basis or cost in the property and would mean less capital gains for you at the time of sale.

Good luck to you!

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C

CY110Author

Thank you for the reply. The deed was actually signed over to me(no death involved), does that make a difference?

J

JandKit

Hi CY110

the stepped-up in basis happens when the price of an inherited asset on the date of a person's death is greater than its original purchase price. If these elements are not met, it would not be considered as a step-up in basis.

Goodluck to you in this endeavor!

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