Inheriting a home can be a delightful or challenging experience depending on whether or not you want the house and the circumstances which led to you inheriting it.
Those who do not wish to move in, can always sell it and benefit from the money they receive.
However, selling an inherited home isn’t as simple as it sounds. The process might be complicated for some and there are several factors to keep in mind.
The first and most important factor you’ll need to consider is how selling an inherited property affects your taxes.
Consider the following:
· Home Sale Tax Exclusion Cannot Be Applied To Inherited Properties
Home sale tax exclusion is applicable on homes where you have lived for at least 2-5 years. Single-home owners can avoid paying tax for up to $250,000 of the proceeds while married owners can avoid paying tax for $500,000 of the proceeds.
· You Can Take Advantage Of Stepped-Up Tax Basis
Typically, proceeds are calculated by summing the purchase price and the cost of any improvements made to the property. In the scenario of property inheritance, the tax basis of the property is its market value during the time of the owner’s death. If the property has appreciated since the owner’s death, the inheritor isn’t liable to pay the added tax amount.
· Reporting Sale Proceeds
All the proceeds you receive from the sale of the house have to be reported as taxable income to the IRS. Even if you are able to legally avoid paying taxes on the property, the inheritance still has to be reported to the IRS.
Pricing the inherited home
Pricing an inherited is home is also more complex than you’d think. The pricing decision hinges on many factors. The pricing of the house depends on current and expected conditions of the real-estate market, whether there is currently a mortgage on the house that needs to be paid off and whether the proceeds from the sale of the house will be used to pay off debt.
The Selling Process
Selling an inherited home can take between a few weeks and to a few months depending on the market conditions and the expertise of the real-estate agent you hired.
Here’s what you should expect from the selling process:
- Property inspection:You will be visited by home inspectors who will investigate the entire property to ensure it meets structural standards and to determine any financial troubles it may give to future buyers.
- Conflict may arise amongst inheritors:If multiple people inherited the property, conflicts are likely to arise regarding the pricing and the splitting of the proceeds. All of this needs to be settled prior to contacting potential buyers.
- Open houses:Real-estate agents usually hold open houses so potential buyers can visit and see the property for themselves.
- Mortgage, bills & other expenses need to be paid off:Just because you have decided to sell the property doesn’t mean you can avoid paying the mortgage, bills and other maintenance expenses. All of these have to be paid off before selling the house.
How Jax Cash Buyers can help you:
At Jax Cash Buyers we make it simple for you to sell an inherited home in Jacksonville, Florida. You don’t need a real-estate agent when working with us.
Here’s how it works:
- Step 1:Once all your bills and expenses have been paid off, fill out our online form with the details of your property.
- Step 2:After reviewing the details and determining whether they meet our criteria, we’ll get in touch with you and make an appointment.
- Step 3:When we’ve reached an agreement, we’ll send you a no-obligation offer.
- Step 4:We’ll close at a reputable company in Jacksonville, Florida and you’ll have your cash payment within 7 days!
If you’re in Jacksonville, Florida get in touch with us today by calling (904)513-0229 for more information.