Today TaxMama hears from Bobbi in Nevada who asks, “If I sell property that I inherited, such as excavation equipment for scrap steel, do I have to be concerned with capital gains?”
Dear Bobbi,
Well, it all depends.
If you just inherited the property, there should be no gain. In fact, perhaps there’s a loss, due to the selling costs.
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But if you inherited the property a while ago, the value may have changed.
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You see, at the date of death, the property gets a stepped up basis to the fair-market value at the date of death. At that point, you can disregard any depreciation that was taken – and you get to start over.
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Typically, something like an excavator is not apt to go up in value as time passes, right? So, most likely, if you waited a while to sell it, you got less than it was worth.
So, in any case, the tax effects of selling the asset are all in your favor.
And remember, you can find answers to all kinds of questions inherited property and other tax issues, free.
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Where? Where else? At TaxMama.com
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