OK here's the rough situation. My mother inhereted a house from an elderly deaf woman she has cared for for 30 years. My mother currently does not own a house, she sold hers 4 years ago and moved into an in-law apt with my sister. She is also still working as a school teacher (she plans on retiring next year) When she sells the house, is the $$$ from the sale considered "Income" or is there some other classification for it since it was basically an inheretence? However it is classified, how will it affect her income tax? Her current income level is around the $40-50k level and the house is valued in the $95k range. Any help or a push toward where I might find more information would be greatly appreciated.