Do I pay capital gains tax when I sell a house I inherited?

Capital gains tax on an inherited house is governed by federal tax law and generally starts from a stepped-up cost basis set at the value on the date of death, rather than what the original owner paid for it. That basis adjustment often reduces or eliminates taxable gain if the home is sold soon after inheriting it, but the actual math depends on the estate's specifics and how long you hold the property afterward. A CPA or tax attorney can calculate your actual exposure before you list.