Is the money received from the sale of inherited property considered taxable income?
The fair market value (FMV) of the property on the date of the decedent’s death. The FMV of the property on the alternate valuation date if the executor of the estate chooses to use alternate valuation. See the Form 706 Instructions, United States Estate (and Generation-Skipping Transfer) Tax Return. The special use valuation for estate tax purposes of qualified real property used for farming purposes or in a trade or business other than farming. However, if an interest in such property is disposed of or ceases to be used in a qualified use during the 10 year period following the decedent’s death, additional estate tax is imposed. If the qualified heir elects to pay interest on the additional estate tax, the adjusted basis of the property will be deemed to have been increased, immediately before disposition, by an amount equal to the excess of its fair market value on the date of the decedent’s death over its special use value. See Form 706 (PDF), U.S. Estate (and Generation-Skipping T
To determine if the sale of inherited property is taxable, you must first determine your basis in the property. The basis of inherited property is generally one of the following: • The fair market value (FMV) of the property on the date of the decedent’s death. • The FMV of the property on the alternate valuation date if the executor of the estate chooses to use alternate valuation. See the Form 706 Instructions, United States Estate (and Generation-Skipping Transfer) Tax Return. If you or your spouse gave the property to the decedent within one year before the decedent’s death, see
To determine if the sale of inherited property is taxable, you must first determine your basis in the property. The basis of inherited property is generally one of the following: (1) The fair market value (FMV) of the property on the date of the decedent’s death. (2) The FMV of the property on the alternate valuation date if the executor of the estate chooses to use alternate valuation. See the Form 706 Instructions, United States Estate (and Generation-Skipping Transfer) Tax Return. (3) The special use valuation for estate tax purposes of qualified real property used for farming purposes or in a trade or business other than farming. However, if an interest in such property is disposed of or ceases to be used in a qualified use during the 10 year period following the decedent’s death, additional estate tax is imposed. If the qualified heir elects to pay interest on the additional estate tax, the adjusted basis of the property will be deemed to have been increased, immediately before di
