Comments on: Do I include money received from the sale of a house I inherited on my income tax returns?

By: whatevit

whatevit — Fri, 20 Mar 2009 21:51:42 +0000

The sale of the house. What was the assessed value at the time you received it? This amount subtracted from the sale price leaves taxable income and should be reported. BE AWARE THAT YOU CAN APPLY THIS AMOUNT TO THE PRINCIPAL OF YOUR HOME AND DELAY THE TAX LIABILITY. In the event it was sold for less than the ***** value, YOU CAN NOT CLAIM A LOSS.

The annuity is an INSURANCE PRODUCT it is not income and is not taxable. Record the 1099 as income and the annuity as non-taxable, for a net taxable base of “$0.00″.

I am not a tax accountant, and I am sure that the rules that are given state a specific way to report. However the end result is the same.

By: happy_wifey

happy_wifey — Wed, 18 Mar 2009 13:16:19 +0000

yes and yes……not sure why you think there will be no tax…I’m 99% certain you will have to pay capital gains tax on the money you received from the sale of the house…and the 1099 must be reported as taxable income as well…. Sorry to be the bearer of bad news…

My grandmother passed away, leaving her house to her 3 children…they inturn sold the home..they had to split the gain from the house sale in 1/3’s and each is required to pay capital gains on their 1/3rd of the money…..the gain from the house sale made their income enough that it made their social security income taxable also..leaving them owing the IRS close to $5,000 this year….

By: Jay

Jay — Mon, 16 Mar 2009 20:50:57 +0000

Let’s correct a mistake. Just because you sold within a few months doesn’t automatically mean no tax.

The day of the inheritance (i.e., the day the house legally belonged to you), the house had a market value. This is the “cost basis.” You can add to the cost basis certain things, like additions. But, for now, let’s leave it simple.

When you sell it, the difference between the cost basis and the sale price is profit. If that amount is under $250,000 (which I’ll bet it is, given the short time period), then you owe no taxes on the sale.

However, you MAY owe taxes on the inheritance, depending on how it was given to you. You will need to check with a tax expert to confirm that it was given to you in a way that would not require paying any sort of inheritance taxes.

As for the IRA… If it was rolled over to you into another IRA, no taxes are due at this point. If you took it as cash (or other instrument), you may owe penalties and taxes. My guess is that you will. If you got a 1099, unless it’s marked otherwise, it’s income that you will need to report.

By: Scottee25

Scottee25 — Sat, 14 Mar 2009 12:38:18 +0000

Did your parents estate go through probate? How exactly did you receive the house? Via trust? Will? If it was willed to you, then part of the inventory process of the probate would have been to get the home appraised. This amount is important because the difference between the appraisal and the selling price is your capital gains/loss and that is what you need to declare on your taxes.

By: choko_canyon

choko_canyon — Fri, 13 Mar 2009 18:33:57 +0000

Call a tax attorney or your accountant. Do it now.

By: Shelly t

Shelly t — Thu, 12 Mar 2009 02:01:00 +0000

yes and yes. anything you received a 1099 on you must claim if over 600 dollars.