T asked in Business & FinanceTaxesUnited States · 4 months ago

I purchased my parents home from their estate and now I want to sell it. How does capital gains tax work in this case?

4 Answers

  • Judy
    Lv 7
    4 months ago

    The same as if you purchased from anyone else.

  • 4 months ago

    You take the price you paid and you add the closing costs. That's your cost basis. If the sale plus the closing costs of the sale give you a loss, you may be able to deduct the loss. If you realize a gain, it's taxable.

    If you own the property for less than one year, the gain is taxable as ordinary income. If you own the property more than a year, you will get the favorable capital gains tax treatment. How much tax depends on your other income.

  • 4 months ago

    Just the same as if you bought it from a stranger.

  • Anonymous
    4 months ago

    When you purchased the house, that price became your cost basis. When you sell it, you might owe capital gains on the difference between what you sold it for and what you bought it for. If you used it as your primary residence, you might not owe anything.

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