Taxes on inherited properties when selling

[Kurt K.]

Hi BPers

I have been told that if I sold one of my inherited properties, I would have to pay taxes only on the amount that is above the appraised value and not the total sale. Can anyone confirm this?

I'm in IN and wasn't sure if different states had different policies.

Thank you.

[Tyler Mullen]

I'm not a CPA but have done professional fiduciary work for 10 years.  As far as I know if you inherited title directly from the deceased, in the eyes of the IRS you get a stepped up cost basis to the value of the property on the date of death, so your capital gains on the sale are figured with this stepped up cost basis.

In my profession we sometimes get an appraisal soon after the DOD to establish the value, otherwise we use the county appraised value, for instance when we are mopping up a probate where the DOD happened long before we were involved or if the probate has no cash to pay an appraiser.

I don't know anything about IN specific tax laws, sorry.

Tyler Mullen, CFE