I inherited a gift from My mother of a valuable piece of artwork. I now want to sell the artwork and am trying to figure out the basis for estimated the potential taxes. Is there any guidance for this scenario?

ANSWER

Expert Matthew Peterson's Answer:

In IRS Publication 551, it is explained that inherited property generally has a basis equal to the appraised value of the asset on the date of death. The piece of artwork should have been appraised at the time of death for federal or state inheritance tax purposes. Use that value as your basis and calculate your taxable gain by subtracting your basis from the selling price. Keep in mind that for collectibles, there is a 28% tax rate at the federal level.

Matthew Peterson, CPA

Washington

4 yrs experience

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