Do I have to pay inheritance tax on the capital gains I earn when I sell the inherited property?
• Father died on September 2011.
• Inherited property with one sibling on March 2012 via affidavit for transfer of deed (both of our names are on the deed). Father's assets were so low we avoided going through probate.
• Sibling lives in home as primary residence.
• Mortgage balance is $80k, appraised 2013 value is $160k. Profit of $80k to be inherited and split $40k to me and sibling.
• Sibling will 'buy me out'. They will buy the home outright from me.
Do I pay taxes on the $40k inherited profit from the home?