Philadelphia, PA asked in Tax Law and Real Estate Law for Pennsylvania

Q: In phila, Pa I aquired my mothers house by survial and im on deed. If I sell the house what taxes do I pay and how much?

Related Topics:
1 Lawyer Answer
James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Tax Law Lawyer
  • Sacramento, CA

A: In Philadelphia, Pennsylvania, when you sell a house that you acquired through inheritance, you are potentially subject to capital gains tax. This tax is based on the difference between the selling price of the house and its value at the time you inherited it (known as the 'stepped-up basis'). If the house has increased in value since you inherited it, you may owe capital gains tax on the profit.

The specific amount of tax you'll owe depends on the sale price, the inherited value, and any improvements you've made to the property. The federal capital gains tax rate varies based on your income, but it's typically 0%, 15%, or 20%. Pennsylvania also has a state income tax, which applies to capital gains.

It's also important to consider any exclusions that might apply. For example, if you've used the house as your primary residence for at least two of the last five years, you may qualify for an exclusion of up to $250,000 (or $500,000 for married couples) on capital gains.

Given the complexity of tax laws and the potential for significant financial impact, it's advisable to consult with a tax professional or an attorney knowledgeable in real estate and tax law. They can provide a more precise calculation based on your specific circumstances and help you understand all your tax obligations related to the sale. Remember, thorough planning and professional advice can help you navigate these matters effectively.

Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.

The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.

Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.