Paying taxes after selling condo after sister passed away

Forum|Forum|5 years ago
March 18, 2021
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My sister passed away in June of 2020 and owned her Condo, we have gone through probate and finally have it in our name and want to sell it, do we have to pay taxes on the money we earn after the sale? We were not on the Deed when she passed away.

Not A Product Question

DianeW777

Yes, if there is any gain on the sale.

If you inherited the condo, then the cost basis for you will be the fair market value (FMV) on the date of death of your sister. This translates into very little gain, if any, on the sale. If the condo is sold close in time to her death, then the sales price and your cost basis will be very close. Sales price is usually a clear indication of FMV. Inherited property is always considered held long term, which also provides the tax advantage of capital gain treatment.

In its simplest terms, FMV is the price that an asset would sell for on the open market.

Capital gain treatment means the tax is limited, regardless if your regular tax rate might be higher.