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Inheriting a house is a big deal — but the last thing you want is a surprise tax bill when you go to sell it. The good news is there are several legitimate ways to reduce or completely avoid capital gains taxes on an inherited property. Here's what you need to know. First — Understand the Step-Up in Basis This is the biggest tax break you get as an heir. When you inherit a home, your cost basis is automatically reset to the market value of the home on the date the owner passe

If you've inherited a home in Michigan and are trying to figure out your options, you may have heard about the "2 year rule." Here's exactly what it means and how it affects you. What Is the 2 Year Rule? The 2 year rule refers to the IRS primary residence exclusion. It states that if you live in a home as your primary residence for at least 2 out of the last 5 years, you can exclude a large chunk of profit from capital gains taxes when you sell: $250,000 exclusion if you're s

If you recently inherited a house and are thinking about selling it, one of the first questions that comes to mind is: will I owe taxes on this? The short answer is — it depends, but in most cases, you'll pay far less than you'd expect. Here's a simple breakdown. The Good News: The Step-Up in Basis When you inherit a home, the IRS gives you something called a step-up in basis. This means your cost basis on the home is reset to the market value of the home on the date the orig