Tax as ordinary income?

[Patch]

My Wife inherited a small house from her Mother. We rented it out for 5
years, declaring the income on our taxes. We sold the place a few months
ago, my question, do we declare the selling price as ordinary income?

Thanks

 

[Paul]

My Wife inherited a small house from her Mother. We rented it out for 5
years, declaring the income on our taxes. We sold the place a few months
ago, my question, do we declare the selling price as ordinary income?

You will have a capital gain on the sale that will be taxed. Your gain is
your inherited basis, less depreciation, plus any improvements you made, and
sales costs subtracted from the sales price.