Q: My mother in law died in March. We are in the process of selling her house. She bought it 10 years ago for about $75,000.
We believe the property is now worth about $125,000. Will we have to pay capital gains taxes on it? If so, how much will we owe?
A: My condolences on the loss of your mother-in-law.
Your mother-in-law is entitled to pass down $2 million in her estate tax-free this year. When you inherited her property, you inherited it at its current market value, approximately $125,000.
That amount is counted toward her estate. As long as the estate is valued at $2 million or less, you can sell the property and keep the proceeds tax-free.
For more details, please consult with your estate attorney.
Published: May 23, 2006