You wake up one day to find out that you inherited your parent’s home. If you don’t have your own house yet, you might want to decide to move in. But, what if you already have your own house? What do you do with your parent’s house that they plopped on your lap?
According to Craig Venezia in his article in Forbes, apart from moving into the house, you could either sell it or rent it out.
What to do before Selling the Inherited Property
This is a big decision that you have to make. Even though the house may look old, you cannot deny the fact that it would be a pity to let the property go to waste. Before selling the inherited property, you should first find out how much the house is worth. You can do this by comparing prices in St. Louis to price the property right.
Make sure that the homeowner’s insurance and other bills had been paid up to avoid inconveniencing the property’s buyers in any way. You’ll also have to pay any remaining balance with any real estate commissions, transfer taxes, and other costs involved in closing the selling of the property.
Taxes to Pay after the Sale
Closing the sale on an inherited property means additional income on your part. Keep in mind, however, that you may have to pay taxes in connection with the sale. Several reports reveal that inherited properties do not qualify for the home sale tax exclusion. But you can take advantage of the stepped-up tax basis which is the fair market value of the property at the time of the death of the previous owner. This keeps you from having to pay taxes brought about by the appreciation of the property over the past years.
Selling the inherited property would be a good idea but make sure you consider the benefits and downsides.