How to calculate Capital Gains on Sale of Inherited Property
HOW TO CALCULATE CAPITAL GAINS ON SALE OF INHERITED PROPERTY : When a property is received on inheritance or as a gift, it is not taxable for the receiver. When the inheritor or the receiver of this gift of property sells it, capital gains on the sale are taxable for the inheritor. The procedure to calculate the capital gains of inherited property is given below: Step 1: You must know the cost of acquisition and indexation in order to calculate the capital gains. Step 2: Cost of the property – The property did not cost anything to the inheritor, but for calculation of capital gain the cost to the previous owner is considered as the cost of acquisition of the property. Step 3: Indexation of cost – The year of acquisition of the previous owner is considered for the purpose of indexation of the cost of acquisition along with the year of sale of the property. Step 4: The base year for such calculations has been updated from 1981 to 2001. Step 5: Calculate the cost of capital gai...
Comments
Post a Comment