Question: What tax am I liable for if my mother passes away and her house is to be sold and split between her four daughters?
Loraine’s Answer: I’m going to assume that (A) your mother is domiciled (has her principal residence) in Georgia; (B) that she is a U.S. citizen or U.S. permanent resident (green card holder); (C) that, like most people in the US now, she owns assets, including the death benefits on life insurance on her life, that are collectively worth less than the current federal Basic Exclusion Amount (the estate tax exemption, which at the time this answer was given in 2025 was $13,990,000); and (D) you are one of the four daughters you mention.
Assuming all of that is true, then you likely won’t be responsible for any taxes on the house if your mother passes away and leaves her home to you and your three siblings. Georgia has no state-level inheritance or estate taxes. The US has an estate tax, but the estate tax exemption amount is so high that most people will never have to worry about paying it.
As for the state and federal income taxes, depending on how quickly the house is sold after your mother’s death, it’s likely that few or no income taxes would be generated as the result of the sale. Here’s why: If your mother sold the house during her lifetime and if her income tax basis in the house was less than what is the house is sold for, then she might have had capital gains income on which she might have had to pay capital gains taxes (but even then, there is a fairly large exclusion for gain on the sale of a principal residence that might have prevented her from paying capital gains taxes on most or all of the profit on a sale). However, if your mother dies owning the house, then her estate will receive the property with a new income tax basis that is equal to the fair market value of the property as of the date of her death. Unless the house appreciates significantly between the date of her death and the date it is sold, that will mean that the estate will likely have little, if any, capital gains income to report, and it’s likely that neither the estate nor the beneficiaries will have to pay any income taxes on the sale of the house.
The estate WILL need to pay property taxes on the house if they come due while it is still part of the estate, and you may need to pay a portion of unpaid property taxes as part of the sale if the sale takes place before those taxes have been paid. However, those will be paid by the estate, not by the beneficiaries unless the beneficiaries decide to keep the house instead of selling it. In that case, after a distribution out of the estate, the beneficiaries will be responsible for paying the property taxes as they come due after the distribution.
The same analysis will generally apply if your mother owned at her death any other appreciated capital gains assets, like stocks or bonds that are held in a taxable brokerage account. However, IF your mother has any IRA, 401(k), or similar tax-deferred accounts that are not Roth accounts, THEN the beneficiaries of those accounts will have to pay income taxes on the assets in those accounts as those assets are withdrawn. That’s the main exception to the rule that death wipes out income taxes that you might otherwise have to pay.
If you end up dealing with your mother’s estate, I strongly recommend that you have appropriate legal counsel help you figure out any potential tax liabilities, as well as other issues that apply to dealing with her estate.
Key Estate Planning Takeaway: Capital gains taxes are not usually owed by beneficiaries who inherit a home through a parent’s Will, and in Georgia, for most people, it is unlikely that any estate taxes will apply. However, property taxes may be owed.
This “Q&A with Loraine” blog series is inspired by answers from Morgan + DiSalvo Partner Loraine DiSalvo to actual user questions posted by individuals on www.avvo.com. This blog is a more in-depth response than can be given on their site under their character limits for answers. To view the original question and Loraine’s original response, click here.
