I am a US citizen and I recently inherited property from my mother who live in Italy. The property was originally purchased for $150,000 and at the time of death was worth around $600,000. Can I receive a step-up in basis and will I owe any taxes?

ANSWER

The BIDaWIZ Team's Answer:

If you inherited the property, then it's highly unlikely that there was a gain if it was immediately sold after your mother's passing. As per the Internal Revenue Sections 1014(a)(1) and 1014(b)(1), when you inherit property you can still receive a step-up in basis to the fair market value at the time of death even if it is foreign real property that is inherited by a United States citizen from a nonresident alien. Thus, it's highly unlikely that you would need to pay taxes on these monies.