What are the capital gains tax implications on inherited assets?

What are the capital gains tax implications on inherited assets?

When you inherit assets, you typically don't pay capital gains tax on the appreciation that occurred during the decedent's lifetime.

So, if I sell an inherited property, how is the tax calculated?

The tax is calculated based on the difference between the sale price and the fair market value of the property at the time of the decedent's death.

What if the property has decreased in value since the time of inheritance?

If the property has decreased in value, you may be able to claim a capital loss, which can offset other capital gains.

Are there any exceptions or special rules I should be aware of?

Yes, there are exceptions, such as the primary residence exclusion, which may allow you to avoid capital gains tax if certain conditions are met.