5 Inherited House Tax Questions You Should Ask

5 Tax Questions You Should Ask When You Inherit A Home

Five questions you should ask when inheriting a home.

Hi, it’s Nick with Sell my San Antonio House. If you’re inheriting a home and you’re curious about what taxes are going to come along with that, here’s five questions you should ask whenever you’re inheriting a home.

First one, does this property qualify for the Home Sale Tax Exclusion, probably not. What that is is when you sell your home, your primary residence, you can usually get an exclusion for the first $250,000, or $500,000 for a married couple, that you don’t have to pay taxes on. But when you inherit a property, it’s generally not your primary residence. You haven’t been living there for two years. And so you don’t qualify for that. Good news is there’s a good chance you won’t need it.

Because the second question, does this qualify for a stepped-up basis? Well, what’s a stepped-up basis? So a stepped-up basis is basically this: when you inherit a property, your new basis is the value of the property at the time you inherited it. So if you inherit it today and it’s worth $100,000, so the basis is $100,000. If you then sell it for $100,000, there’s no capital gain there. So there’s no gain that you’ll have to pay taxes on. It doesn’t go back to the fact that you inherited it and you didn’t pay for it so you had to pay taxes on all $100,000. No, you get a stepped-up basis. So you start with the value of the property, the time you inherit it.

What if I sell it for less than the value of the property at the time inherited? That’s question number three. Can I deduct that? And yes, you probably can. So if you were to sell the property as-is for less than what the value is at the time you inherited it, you can take a deduction. Now there’s a certain amount you can deduct each year. And so. But what you can do is lots of times deduct some this year and then next year, and you use that deduction for several years to come.

Fourth question what taxes will I pay? So you’re probably still going to have to pay any property taxes. So those will be for the county that it’s in, possibly the city. And so the property taxes on that usually will be taken out. If you owe nothing, then it’s nothing. If you just owe that year’s amount up to the day you sell it, that money will be taken out at the time you sell it. But you can usually look up your property taxes. There’s probably a county website, you can see where it is. And if you want to figure out are any taxes owed or how much will it be at the time you sell it? That amount is probably going to come out.

The fifth question, how can I easily sell this property quickly for cash as is? Give us a call. We buy them all the time, especially in San Antonio area, other parts of Texas. But we buy a lot of them because a lot of people that have inherited property, “Hey, we just want to go ahead and sell this property. What can we do?” It’s fast. It’s easy. We make you a cash offer. If that’s something that we can help you with, or if you just want to ask a couple of questions, happy to help you out. Give us a call at (210) 201-6644 or reach out to the website sellmysanantoniohouse.com.
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