Suppose you sell the inherited property immediately, and the selling price is similar to the property’s fair market value at the time of the original owner’s death (also known as the “stepped-up basis”). In that case, you may not owe any capital gains tax.
This is because capital gains tax is typically levied on the difference between the sale price and the property’s value at the time of the original owner’s death. If these values are nearly the same, the capital gain—and thus the tax—could be minimal or even zero.
However, if the property’s value increases significantly in the short time between inheritance and sale, there could be capital gains tax to pay.
Remember that tax laws can vary by state and change over time, so it’s always wise to consult a tax professional or advisor to understand the specifics of your situation.