Selling An Inherited Home: What You Need To Know
Real estate is seen as an advantageous investment by about 27% of Americans, but inheriting a home from a loved one can pose more troubles than benefits. If you find yourself in this situation and want to start the process of selling an inherited home, there are some pieces of advice you should know and some dangers you should avoid. Read on to steer clear of potential pitfalls and take advantage of your new property.
Unless you are going to live in an inherited home for at least two years before you try to sell your house, you will not qualify for the home sale tax exclusion. However, you can take advantage of a stepped-up tax basis. While the tax basis for a regular home is calculated using the purchase price plus any improvements, the tax basis of an inherited property is its fair market value at the time of the previous owner’s death. According to the IRS, inherited property sales must be reported as taxable income. If you have any doubts about tax law when selling a home that you have inherited, it is always best to seek the advice of an accountant or an attorney.
When you are selling an inherited home you may want to get it out of your hands as quickly as possible, but there are steps you need to go through first. The most important is to clean out the property of the previous owner’s belongings. Divide up their precious possessions between heirs and family members, and hold a yard sale or estate sale for everything that is left over. Before you sell the house, you also have to wait for it to go through the probate process. You will also have to coordinate the sale with the executor of the will of the deceased. They will have the ultimate authority and responsibility of handling the real estate transaction, for which you should choose a trusted real estate agent.
Selling an inherited home can seem like a massive undertaking, but if you break it down into manageable steps the process will be a breeze. Just remember to soak in any memories of the home that you have and think of the new family who will enjoy the beloved property for years to come.