Taxes Owed on Inherited House

Are estate taxes owed on an inherited house? If somebody paid $150,000 for a house and it is now worth $200,000 are taxes owed on the difference of $50,000? I thought any inheritance somebody received was tax free. This is confusing, thank you.

No, leaving possessions either from a Will or in a notarized document does not make it tax free. There are some loopholes that only a tax accountant or attorney would be able to explain in any great detail, but generally, everything is taxable.

The real estate taxes do not go by how much money a person paid for a house vs. what it is worth in the appraisal market. The taxable value of the home is very different from it's resale market value.

Your city hall appraisal office most likely has it valued at much less than $200,000 and that is good news for you, as the lower the value the lower the taxes. You never want to take issue with low value on your property at the town tax office.