Home |IRS Tax Return | What tax implications should we anticipate when selling a house that was owned by a deceased individual, particularly in terms of the potential capital gains tax, given that the house's value has increased since its purchase in 2011, even though the owner didn't file IRS federal returns in recent years?

What tax implications should we anticipate when selling a house that was owned by a deceased individual, particularly in terms of the potential capital gains tax, given that the house's value has increased since its purchase in 2011, even though the owner didn't file IRS federal returns in recent years?

Robert James, 20+ years of experience in IRS matters
Answered on September 27,2023

Firstly if there’s no living trust then you have to wait for probate that means there could be more debtors than you think so start fixing it up now and do whatever you can to improve the value of the property because unless u pay them off urself and then you can have the house for whatever you want and you can look up property tax I’m sure you aren’t from California but look up ur state property taxes and calculate it’s not any different than what everyone else is paying wherever you are!

It's highly recommended to get an appraisal to determine FMV as soon as possible after the owner passes away. When someone passes away the FMV on date of death is the new cost basis of the home that is used to determine if there are any gains. You can't just go by what Zillow says.

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