Inheriting a home and not sure what to do? Do you keep it, sell it? It’s a tough decision that can often be an emotional one as we deal with the loss of our loved one.
If you’re still going through the probate process, or other issues involved with transferring an inherited property, then you know the stress associated with dealing with attorneys, court officials, real estate agents, and buyers.
Keeping It or Selling It
If it’s the home you grew up in and there’s a lot of memories that you’re not willing to let go of, you may decide to keep the property. If you do, what are your options?
You can choose to move in and occupy yourself, or you can rent it out for a sufficient amount to cover any existing mortgages, insurance expense, property taxes and maintenance expenses. Renting is great if you don’t mind the management duties or additional liability of rental property ownership.
Selling can also be beneficial as it will allow you to quickly move on with other aspects of your life. The additional funds can be used to pay off another mortgage, renovate, travel, or fund the education of a child or grandchild.
Tax Concerns
Fortunately, there are some good tax strategies that can help you avoid paying excessive taxes if you decide to resell your inherited property. If you decide to keep it for the short term, you can move in and occupy the property for two years to earn the capital gains tax exemption for primary residences. The exemption allows homeowners to reduce the taxable amount of the sale by $250k for individuals and $500k for married couples.
Even if you decide not to make the property your primary residence, you still have some protection from taxes thanks to the IRS’s stepped-up tax basis rules for inherited properties. When you choose to sell the property, your tax basis will be the market value at the time of the prior owner’s death. For example, if you decide to sell the house in two years for $320,000, and the property was appraised at $300,000 when you inherited it, you’ll only have to pay taxes on the difference of $20k.
Choosing to Sell
If you’re ready to sell, and you’re not looking forward to putting the property on the market, dealing with nosy buyers, or dealing with any of the stress and hardship surrounding selling the property, there are some very effective strategies to get it sold quickly and allow you to move on with your life. We can make you a cash offer with very few contingencies that will be fair and practical and make the decision to sell easy and stress free. Unlike the conventional selling approach with an agent, we pay all the closing costs so you pay nothing out of pocket.
As many homes that are inherited tend to have, there may be repair and modernization issues that need to be addressed. When you accept an offer from us, you don’t have to make any repairs, deal with any cleaning, or worry about functional and cosmetic upgrades. We’ve designed our closing process to make it as convenient and inexpensive as possible to sell your home. Please reach out to us today by phone, email or text to find out home much you could receive for your property, or click here to request an offer online.
