The Tax Consequences When Selling An Inherited House In South Carolina

Inheriting a home can be a mix of bittersweet emotions. On one hand, you’re left with a valuable property that can improve your life, but on the other hand, you’re still mourning the loss of a loved one. So, you might find yourself wondering, “What are the tax consequences when selling an inherited property in South Carolina?” Well, the good news is that the tax laws are designed to not burden you further when you inherit a property. The financial implications are actually less daunting than you might expect.

Tax Consequences When Selling A House I Inherited In South Carolina

Calculation Of Basis

To understand how you’ll be taxed when you inherit a home, let’s talk about the calculation of basis. Basis refers to the asset cost used to calculate capital gains and other taxes. In South Carolina, when someone passes away, the value or basis of their property is adjusted to the market value at the time of their death. For example, if a person bought a home 20 years ago for $25,000 but it was worth $100,000 when they passed away, the property would be valued at the latter amount for calculating capital gains.

Capital Gains Tax

Now, let’s dive into capital gains tax. Estate taxes are imposed when someone dies with assets exceeding certain thresholds. This includes any property they owned at the time of death, as well as any property transferred during their lifetime. Capital gains or losses are the profits or losses from selling property used for personal or investment purposes. This can include houses, furniture, and more. When you decide to sell a home in South Carolina that was inherited, the sale is considered a capital gain or loss for income tax purposes. Generally, to qualify for lower rates of long-term capital gains, you need to have owned the property for at least a year. But regardless of how long you’ve owned the inherited home, any gain or loss will still be treated as long-term.

Income Taxes

In addition to capital gains tax, you’ll also need to consider income taxes. However, you don’t owe estate taxes on the inherited property. When you sell an inherited home, you must report it for income tax purposes. Start by calculating your capital gain or loss, which is the difference between the sale amount and the basis. Report this amount to the appropriate authorities.

Managing an inherited home can be stressful, especially when you have to take care of the property and pay taxes at the same time. To sell your home, it’s important to go through the probate process in South Carolina as the first step. The court will give you the authorization to proceed with the sale. If there are other individuals involved in the inheritance, make sure to reach an agreement with them before making any decisions. You can then file a petition asking the court to allow you to sell the property.

When it comes to the amount of tax you’ll need to pay, it will be based on the capital gains or losses from the sale of the house. If you’re looking for a smooth and legitimate sale, you can reach out to House Hub Real Estate Solutions at 864-272-5400. We’re local experts here in South Carolina and we know the market better than anyone else. If you still have questions about the tax consequences of selling an inherited house in South Carolina, we’d be more than happy to discuss it with you in more detail.

Selling an inherited house can be a huge relief, and selling to an investor makes the process simple and fast. If you need guidance on how to sell your home in South Carolina, don’t hesitate to contact us. We’re here to help! Just fill out the form provided through this link to get a fast and fair cash offer on your South Carolina house.