There is no state inheritance tax in Florida. However, the is a federal estate tax. Depending on your immigration status will depend what exemption amount you can qualify and the amount you pay. I would contact a tax attorney or cpa for more information.
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I agree with my colleague. Your CPA would be the best resource on this subject as he/she will know the grand scheme of things with reference to your portfolio. Florida does not have estate/inheritance tax until an estate reaches the federal limit. If your sister was the decedent and died within the last few years, then that limit is a little over $5 million.
This is a "tax" question, not one of real estate law; you might want to repost your query on the 'tax' forum where you are sure to get better answers.
That said, your facts are a bit unclear, and some critical facts are missing. You ask about "capital gains" (but you don't mention estate or inheritance taxes), and what is your statuts? Are you the PR?
Wwhen did your sister pass? is this property currently going though probate NOW, or did you get it sometime in the PAST, you held it for some time, and NOW plan to sell and distribute the proceeds. Different facts will yield different answers. Be sure to consider this, and note it when re-posting.
Hope tis helps.
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If your nieces and nephews inherited a house which they are now selling, the basis in the property is the fair market value on the date of death. Any appreciation in the property would be a capital gain to them. If the property has not substantially appreciated from the date of death to the date of sale then there would be no capital gains tax to them. The inheritance likewise would not be subject to income tax since an inheritance is not income to the recipient.
The decedent, however, may be subject to federal estate tax. It would depend on the value of the estate at the time of death.
It might be a good idea to consult with a tax attorney who can review all the facts and circumstances and render an accurate opinion based on the entire set of facts.
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Generally there is no income/capital gains tax to pay on inherited real estate. You receive a stepped up basis on the date of death (fair market value) and normally if sold shortly thereafter you will need to report the sale on your taxes but generally there is no income/capital gains tax to pay
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