You may owe capital gains on inherited property — but only after you sell it. The gain is based on the difference between the final sale price and the cost basis of the property, typically the fair market value of the home on the day the decedent died. However, even if you sell for a profit, you may not owe capital gains tax. There are a lot of factors that depends on, including exactly how much money you earn on the sale and whether you file taxes individually or jointly with a spouse.