On the other hand if the bequeathed property has been a principal residence, your parent’s estate would not be subject to capital gains tax on the disposition of the property.
However, if you were to sell your parent’s principal residence — say, because you already have a home — the sale would be subject to capital gains tax, since you’re selling a piece of property that is not your primary residence.
Sell the house shortly after you inherit and you’ll find the capital gains tax will be nominal, as there will be little difference between the assessed fair market value that was done when you inherited the property and the sale price.
Of course, all this gets a lot more complicated when you have multiple owners.
Say, for example, your parents leave their primary residence to you and your two sisters. As siblings, you make a unanimous decision to allow the youngest to move into the home and to take out a mortgage to buy out the other two siblings.
Since the youngest now considers the inherited property as their primary residence, they won’t be subject to tax.
The other two siblings, however, would have to pay capital gains tax once the youngest child has moved into the home. That’s because the change in use of the home triggered what the taxman calls a “deemed disposition”— the use of the home has changed, and thus the home is considered to have been sold for tax purposes.