Ask Terry Questions Tax on sale of inherited property

Tax on sale of inherited property

By Terry Savage on July 01, 2023 | Taxes & Economy

I have recently sold a condo my parents purchased in 1997. They are now deceased. What taxes will I be responsible for ? My father was the last to leave us in 2018. I then inherited the condo. Illinois property and resident.

Terry Says

You inherited the condo and your “cost basis” is the value on the date of his death. See if you can find records of what similar condos sold for in that building within 3 months of his death.

Did you move into the condo and make it your residence for at least one year? If so, you have a $250,000 gains exclusion on sale of your own residence, so you probably don’t owe any taxes.
Did you rent it out? Then it was considered an investment property, and you will pay capital gains taxes (maximum 20%) on the gain differential between your cost basis (as described above) and the net sales price (minus any improvements you may have made in the property — ie new kitchen etc).



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