(04-29-2021, 07:14 AM)The Real Marty Wrote:

(04-29-2021, 07:05 AM)StroudCrowd1 Wrote: If what you say is accurate,, does that mean when you sell it, capital gains are only paid on the profit made between the sales price and the value of the home at the time of inheritance? Does this mean an appraisal of all assets is required upon the death of a parent?

No.  Currently, if you sold the hypothetical home, you would pay capital gains tax on the sale price minus the value of the house when you inherited it.  Under the new tax proposal, capital gains tax would be assessed when you inherit the house, and calculated based on the value at the time of inheritance minus the price paid for it many years ago when the parent bought it.  

Currently, appraisal of all assets at the time of the inheritance is strongly recommended, so if you sell something, you calculate your capital gain based on the stepped up basis, that is, the value when you inherited it.  

Example: your parent bought the house 30 years ago for $100,000.  When you inherit it, you get an appraisal, and the value is appraised at $500,000.  A year later, you sell the house for  $510,000.  Under current law, you would pay capital gains tax when you sell the house, and the capital gain that would be taxed would be $10,000.  Under the proposed law, you would pay capital gains tax when you inherit the house, and the capital gain to be taxed would be $400,000.