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How to Sell Inherited Property
The very idea of inheritance is hard to process. While most of us want to leave things behind for our loved ones, being on the receiving end is never easy. On top of the emotional challenges, dealing with inherited property can also be difficult and complicated. For many people, the best solution is to sell the property, but that’s not always a straightforward route either.
In the face of these challenges, more knowledge doesn’t hurt, and this tutorial will help you understand what is needed in order to sell an inherited property. If you do decide to sell, call We Buy Dallas Houses to get a no-obligation cash offer on your home.
Execute the Will or Probate
With inheritance, property passes in ownership from one party to another. The way that happens can depend on a lot of things, and before the inherited property can be sold, the new formal ownership must be established.
If the inheritance is clearly laid out in a will, then the will can usually be followed. The will is executed, and ownership changes accordingly.
That said, wills can be contested. If this happens, the property cannot be legally sold until the contests are settled.
When there is no clear will, then the property typically goes through a probate process. Ultimately, it passes to the next of kin, and the specific rules governing probate (or a comparable process) vary by state.
Calculate Taxes
Technically, you can sell an inherited property without calculating taxes. It’s just a risky decision.
Inheritance taxes can get very complicated, especially when multiple people inherit a single property. But we can simplify the ideas to help you gauge the tax liabilities that might come from your inheritance and/or selling the property.
First off, you are not federally taxed on a property unless it exceeds a minimum value or you liquidate it. Note the “or” in that sentence. If you inherit a house that is below the minimum, you still might owe taxes when you sell that house.
Here’s where things get a little bit trickier. When inherited property is sold, it is only taxed on profits made from the sale. So if the house is purchased at $100,000 and sold for $200,000, you only pay taxes on the $100,000 of profit from the sale.
But there’s even more to this. When you inherit a property, its value is assessed for tax purposes. Using the day when the original owner passes, a new value is assigned to the house. That is reset as the “original” cost of the house, and you only pay taxes for sales proceeds above this new value.
An example might make it easier. Say the house was originally purchased for $100,000 some years ago. When it is reassessed, it is valued at $200,000. If you sell it for $200,000, you don’t owe any federal taxes on that sale. If you sell it for $250,000, you only owe taxes on $50,000.
Secure Agreement
One of the most important reasons to figure out tax liabilities is because it can impact whether or not every owner or executor wants to sell. This is the most complicated part of the process.
If a property has a sole new owner or beneficiary, then things are simple. That one person can decide whether or not they want to sell the house.
If there are multiple new owners or beneficiaries, then everyone has to agree to sell the property, or no sale can be conducted. A single objector can prevent the sale of the house.
So you have to get unanimous consent before going forward with the sale. In some cases, selling the property is the easiest way forward. Other situations are more complicated, but this has to be resolved first.
Sell the Property
At this point, there are no other major obstacles. You can sell the property as you see fit. You can hire a realtor and go through all of that business to liquidate the property. You can also take an easier route by selling to a cash home buyer They will offer cash for the house, and they can close without making you jump through any hoops. Especially if the property is in another town, city, or state, selling to a property investor can seriously simplify your life.
When it comes time to sell, We Buy Dallas Houses can help. We buy houses in the area for cash, and we can offer you a streamlined process with a guaranteed sale and no hassle. Contact us today. You can get an offer with absolutely no commitment and make your decision from there. If you want to sell your house fast, we’re your best resource.
