Newport News, VA asked in Estate Planning and Tax Law for Virginia

Q: I am selling land that I inherited and I wanted to know if I will have to pay taxes on the money that I receive?

It's in Virginia.

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1 Lawyer Answer
Eric Steven Day
Eric Steven Day
Answered
  • Estate Planning Lawyer
  • Henderson, NV

A: You will have to pay taxes on the land that you sell if the value that you get for selling the property is larger than the value that you inherited the property at. When you inherit property, the estate tax takes care of the taxes due on the difference in value that the deceased individual holds the property at, from what it is passed to you at. When you inherit the property you get the property at the Fair Market Value of that property at the time of inheritance. If the FMV of the property when you inherited it was $100K and you sell it for $125K, you will have a $25K gain on the property and be subject to capital gains tax on the income (this is a lower rate than your income tax). You only have gain on what you sell the land for above what you inherited it at.

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