Q: Which value do I use for capital gains tax on inherited property sold in TN?
I received a property through a quit claim deed from my mother in 2023, and she continued to live there until she passed away in early 2024. She originally purchased the house in 1995 for $95,000. The property's value was approximately $350,000 at the time of her passing, and I sold the house for $320,000 two months after her death. During my brief ownership, I only made minor repairs, like fixing plumbing, which didn't affect the value. For the purposes of calculating capital gains tax, should I use the purchase price she paid in 1995 or the property's value at the time of her passing in 2024?
A:
Hi there.
Unfortunately, when you inherited the property, you received your mother's original basis, which is $95,000. This amount will be used to calculate any capital gains.
If you had inherited the property after her passing, you would have benefited from a step-up in basis and could have used the property's value of $320,000 instead.
Best of luck.
Justia Ask A Lawyer is a forum for consumers to get free 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 Justia and you, or between any attorney who receives your information or responds to your questions and you, 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.
