Inherited Property

Inheriting a property comes with decisions most people aren't prepared for. Sell, rent, or keep — and each option has different tax, financial, and practical implications.

The Step-Up Basis (This Is Important)

When you inherit a property, your cost basis is typically "stepped up" to the fair market value at the date of death. If the property was originally purchased for $100,000 and is now worth $400,000, your basis is $400,000 — not $100,000. This means if you sell soon after inheriting, you may owe little to no capital gains tax.

This is one of the most significant tax advantages in real estate and often changes the sell vs. keep calculation entirely. Consult a CPA, but understand this before making any decision.

Your Options

• Sell immediately: Capitalize on the step-up basis. Clean exit with minimal tax if done quickly.
• Rent it: Keep the asset and generate income. Works if the property is in good condition and you can manage or hire management.
• Move in: Convert to primary residence. May qualify for the primary home exclusion on future sale ($250K/$500K).
• Fix and sell: If deferred maintenance exists, sometimes investing in repairs before sale yields better net proceeds.

Probate & Title

Before you can sell or refinance, the property needs to be in your name. If it went through probate, this takes time. If it was held in a trust, transfer may be faster. Either way, confirming title is clear before moving is essential.

Multiple Heirs

• All heirs typically must agree to sell
• One heir can buy out others — requires financing based on current value
• If heirs disagree, partition action is possible (costly and slow)
• Renting with shared ownership requires a clear management agreement

Just inherited a property and not sure what to do? Let's think through your options before you decide.