Inherited Property? Your Taxes Might Be Way Lower Than You Think

If you have inherited a property, or expect to, here is something most people do not realize:

When you sell, you may not owe nearly as much in taxes as you think.

I am not a tax advisor, so definitely confirm with your CPA, but there is a rule called the step-up in basis that can work heavily in your favor.

Here is how it works:

Let’s say your parents bought a home in Jupiter for $300,000 in the 1990s. When they passed, the house was worth $1.5 million. If you inherited it, your new cost basis would likely be $1.5 million, not $300K.

That means if you sold it for $1.55M, you would only be taxed on the $50K gain, not the $1.25M difference from when it was initially purchased.

This is a massive deal for anyone thinking about selling, especially with the property values of today.

Why this matters:

• You might not need to hold the home waiting for the “perfect” price
• You could avoid overcomplicating things with unnecessary 1031 exchanges
• You will be in a stronger position to decide whether to keep it, rent it, or sell

If you are in this situation, I am happy to help you look at the numbers and, if needed, connect you with a great local tax advisor. Do not just guess, I can help you make an informed call.