How to calculate tax on sale of inherited property

Inheritance is not subject to income tax. The obligation to pay tax arises if the heir decides to sell the property, and the term of possession of the inheritance does not exceed 3 years. If the heir is the owner for more than 3 years, the tax on income from the sale of property does not have to be paid.

How to calculate tax

The tax calculation formula is the same for both the sale of inherited and non-inherited property. To determine the amount of personal income tax, you must: Set the term of ownership of the property. If before the death of the testator, the heir did not have a share in the inherited real estate, then the beginning of ownership is considered the day of the testator's death.

If there is shared ownership earlier, the date of ownership is calculated from the moment of acquisition of this share.

 Determine the transaction price. The actual amount of payment for the property may differ from the amount specified in the purchase and sale agreement. The tax service does not accept receipts and testimonies about the transfer of money for calculation. The transaction price is the amount specified in the agreement.

Make a property deduction. The deduction is a fixed amount and amounts to 1 million rubles.

Determine and apply the bid (13% or 30%). For Russian citizens, the rate is 13%. The 30% rate is paid by non-residents and foreigners. The three-year rule does not apply to them. They pay tax regardless of the period of ownership of inherited property. A Russian who lives in Russia for less than 183 consecutive days in a calendar year is also considered a non-resident.

What to consider when selling inherited property and calculating tax

You can't specify an undervalued transaction amount in the agreement. Tax inspectors compare the value of real estate with its cadastral value. If there is a significant discrepancy (if the amount indicated is less than 70% of the cadastral value), additional tax is charged.

If the contract of sale is made for several owners, they can determine the amount of taxable income of each of them at their discretion. If there is no such agreement, each of them receives a deduction according to their share.

In case of sale of shares under separate agreements, each of the owners has the right to receive a deduction of 1 million rubles.

The procedure for calculating the tax is the same for all: pensioners, disabled people, veterans and other privileged categories of citizens are also required to pay tax when selling inherited property.