If a person inherits a Commercial property through a WILL and sells it after 1 year are you taxed on the money? What is the tax rate if yes? I know that if you own a house and sell it you are taxed on that money unless you buy another house. Does that hold true for commercial property and property inherited through a will?
Do you get taxed on sales of commercial property inherited through a will?
July 29th, 2010 by Leave a reply »
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It will depend on the basis in the property AND what you sell it for. The tax rate is YOUR tax rate.
When you inherited the property you got a stepped up basis. That is considered your cost. When you sell it for more your have a profit, the profit is taxed. You may or may not be able to take a deduction against income if you sell at a loss.
This question is best answered by a CPA. Do not rely on the answers generated by the tax in a box, or biggie quick tax preparers.
If you inherited the property, you will have a zero basis and the entire amount you receive from the sales will be taxable, unless you re-invest in like property within the time limit set by IRS guidelines.
The tax rate will depend on how much you sell the property for, and how much income you have from other sources.
Talk with your tax preparer or CPA before making any decisions on sales. They know the loop holes and can help you defer taxes on some of the income.
The assessed value that it was probated at is your cost price, the tax is on the amount sold over the cost price.