What Are the Tax Consequences When Selling an Inherited House in Kentucky?


Inheriting a house in Kentucky can have many benefits. You may be able to sell the inherited property to make a profit. Unfortunately, this benefit comes with a hidden consequence you may be unaware of.

When you sell an inherited house in Kentucky, you can be hit with tax consequences if you made property gains during the sale. This can be difficult and confusing to understand, so we will try to break it down for you.

Understanding the Difference Between Capital Gains and Losses

One of the mitigating factors determining the tax consequences when selling an inherited house in Kentucky is if there are capital gains or capital losses during the sale of the property.

  • A capital gain means you sell the house for more than the adjusted basis
  • A capital loss means you sell the house for less than what you paid for it or less than the adjusted basis

What Is an Adjusted Basis in Kentucky?

Adjusted basis means how much the property was worth when it was inherited. The basis is the property’s fair market value on the date it was inherited, typically the date of the decedent’s death. Capital gains and losses will be determined by the value of the property on this date—not how much the decedent originally paid for the property.

An example of a capital gain would be inheriting a house worth $250,000 at the time of death and selling it for $350,000. You would have a capital gain of $100,000 that would be subject to tax consequences.

An example of a capital loss would be inheriting a house worth $250,000 at the time of death and selling it for $200,000. You would have a capital loss of $50,000. The IRS only allows an individual to deduct up to $3,000 per year on capital losses. You can carry the excess losses in future years to offset income.

How to Report the Sale of an Inherited House in Kentucky

The sale of an inherited house will be reported on your IRS Income Schedule D. You need to include the total capital gain or loss from the sale. To do this, you will subtract the basis of the house from what you received for the sale of the house. This will give you a capital gain or loss amount to file on the Schedule D form. You will also need to include the capital gain or loss amount on your personal IRS Form 1040.

Hire an Accountant to Help

It can be difficult to navigate the tax consequences when selling an inherited house in Kentucky, so you may want to hire an accountant to help. An accountant will help you determine your capital gains and losses and help you fill out the proper IRS forms to make those declarations.

We Buy Inherited Houses in Kentucky

Selling an inherited house can be challenging. There are often many extensive repairs that need to be made for the house to be purchased. At We Buy Houses in Kentucky, we will purchase your inherited house as-is. You don’t need to make repairs for us to purchase the house.

How Does It Work?

We make it as easy as 1-2-3 to sell us your home!

Step One—Tell Us About Your Property

Contact us and tell us a little bit about yourself and your property. All we need is basic information about you and your property, and we will connect you with our top agents in your area.

Step Two—Meet With Us

We will schedule a time to meet with you to look at your property and make sure it fits our buying criteria. We will answer any questions you may have, and then prepare you with a written, no-obligation offer.

Step Three—Close the Deal

You can choose the closing date that works best for you. We will meet you at a local and reputable title company to finalize the sale. You will receive cash for your property in as little as 7 days.

Why Choose We Buy Houses in Kentucky to Purchase an Inherited House?

At We Buy Houses in Kentucky, we understand how challenging it can be to sell a house—especially an inherited house that may require extensive repairs that go above and beyond the amount of money you want to spend. That’s why we offer to purchase your house as-is. This means having to make no repairs to the property for us to purchase it.

Here are a few other reasons why you should choose We Buy Houses in Kentucky to purchase an inherited house:

  • You don’t have to wait for buyer financing. We are ready to purchase your home right now, and you don’t need to wait around to find out if the buyer will be approved for financing.
  • No inspection is required. Most buyers will hire an inspector to confirm there are no issues with the house. At We Buy Houses in Kentucky, we will give you an offer on the spot without requiring an inspection.
  • No hidden fees. The offer we present contains no hidden fees for agents or commissions.
  • You choose the closing date. Unlike traditional sales, we let you choose the best closing date for you and your schedule.

Contact Us Today!

We Buy Houses throughout Kentucky. If you’re looking for an all-cash offer on your house that’s easy and hassle-free, contact us today. We will get you in touch with one of our top agents in your area immediately.

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