For many people, inheriting property can involve complex processes, and for a good reason. In most instances, the house will have to go through probation before going to the new owner. However, this might be optional for smaller estates. If you are the one inheriting the house, congratulations! From here, you might be thinking of two things: keeping or selling it. If you plan to sell it, you probably have questions such as what selling an inherited property entails and the laws and practices concerning probate. Selling inherited property is complicated and sometimes involves lengthy processes. If you are a resident of Missouri and are wondering, “How do I sell my house in Kansas City?” or live in California and want to put your inherited property on the market, here’s a guide to help you.
Is It Possible to Sell Inherited Property?
We will answer this question first to take it off the agenda. Yes! You can sell the property you have inherited. Usually, the process involved is quite similar to the process people go through when they sell the houses they bought themselves.
One of the common ways to sell the house is finding an investor looking to buy or looking for a power buyer to make the selling process more manageable. However, there will be different tax implications later on, which may influence your decision to sell the house. You may also have to give the house some attention before selling; this might involve removing something or cleaning. Repairs are essential, too.
The Probate Process
A legal process comes into play when it comes to property inheritance. However, most of the legal action can be sped through if there is an existing will where the deceased left their wishes. If there is no will, the property automatically goes to the next of kin. In both cases, probate is often necessary to control the administration of assets left behind by the deceased to ensure their requests come complete. The court usually appoints an executor to ensure the will goes through and the property goes to the right individuals.
Inheritance Taxes
Taxes are essential to consider. However, most estates are not subject to federal tax. They only arise when selling is involved. The issue of taxes particularly becomes a factor when the asset in question earns a profit.
Taxes result from the excess amount you make based on the property’s value. An additional gain will be subject to the capital gains taxes. For instance, let’s say the property in question was valued at $150,000 25 years ago and has since increased to $300,000. If you sell it for $300,000, you will not be required to pay taxes on the proceeds. However, if you sell it at $350,000, you will be responsible for paying taxes on the $50,000 that is considered an excess. This principle also comes into play in other inherited items, like securities and assets.
Takeaway
It is possible to sell inherited property. However, you must prepare as dispositions of estates can take quite some time, even years, especially when sorting issues with taxes, maintenance, etc. It might be a great idea to have a financial advisor to help you consider the state laws to ensure everything is done according to the law and in your best interests.
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