Updated: August 28th, 2021
When loved ones pass away, they leave behind valuable property. Unfortunately, this can be a burden to the next of kin or people closest with them, who may have no choice but to attempt selling an inherited house in Orlando. Now that you’re responsible for property upkeep, possible landlord duties, taxes and fees – what now?
You Will Most Likely Go Through a Probate
First, the inherited property will have to go through a probate process depending on how it’s currently deeded. Check into local and state laws regarding this type of situation when you’re inheriting properties. If you have already completed probate, but the property is in a different location than where your home state or county court resides, then additional procedures may be necessary.
If you’re inheriting a house with siblings, the property will have to go through a probate process per sibling listed for inheritance. It’s a long and arduous process, but contact SellThatFloridaHouse at (407) 228-3682 to discuss probate if you’re contemplating selling an inherited property in Orlando, FL.
Rent Out the Property
If you inherit a single-family or multi-family residential home and don’t want to live there yourself, add it as an extra source of income by renting out the property. You might have to make a few repairs or upgrades to market it, but over a short amount of time, you will be making more money than if you had invested in one big purchase.
Being a landlord isn’t for everyone- there’s responsibility and work that falls on the shoulders of landlords. There are repairs, projects to complete annually, finding new tenants…the list is endless!
Consider a Cash Sale
If you don’t want to live in or occupy the property in any way, selling it would be another option of what to do with your unwanted inherited property. Before communicating with any real estate buyer or agent, make sure to research similar properties on the market. This will help you understand what fair price is and avoid being surprised when hearing a sale amount.
If you’re looking for a quick sale that doesn’t require any extra fees, then cash buyers are the way to go. These individuals will be willing to pay less than market value in order to skip out on all of those closing costs and real estate commissions. They may even cover your expenses at the end! It may end up being the sale of inherited property at a loss, but for some that’s worth it over having to become a property manager. Dealing with the holding costs and taxes of two properties can be a stressful task.
Tax Consequences When Selling an Inherited House in Orlando, Florida
Inheriting a home is a pretty sweet experience, yet bitter at the same time… You are left with great property value you can use to improve your life, but you are still mourning the loss of a loved one. So you may tend to ask yourself at this point “what are the tax consequences when selling an inherited house in Orlando, Florida?” The tax laws have been designed in a way they will not add any more burden unto you upon inheriting the property. This implies that the financial consequences are less daunting than what you would expect, which is good news for you.
Calculation of Basis
In order to comprehend how you’ll be taxed having inherited a home, you need to know how basis is calculated. Basis, in this case, refers to the asset cost for purpose of the calculation of capital gains along other taxes. When a person dies, the value or basis of their property in Orlando is increased to the market value as at the time of their death. For instance, if a person purchased a home 20 years ago for $25,000 but it was worth $100,000 at the time of their death, that property would be valued at the latter amount for the purpose of calculating capital gains.
Taxation of Gains/Losses
Capital gains or losses refer to what you earn from selling property that you use for either personal or investment purposes. Such can be houses, furniture and many more things. If you decide to sell an inherited home in Orlando, that sale is regarded as capital gain or loss for the purpose of income tax. In most cases, for you to qualify for lower rates of long-term capital gains, you are required to have held that property for at least a year. However long the duration you have been in ownership of an inherited home, any gain or loss will still be treated as long-term.
Report Sale of Inherited Property
Upon selling an inherited home, you have to report it for the income tax purposes. You should first calculate your capital gain or loss. This is done by subtracting the basis from the sale amount. You should then report that amount to the necessary authorities.
Having an inherited home can be stressing given the fact that you have new property to take care of and pay taxes for it at the same time… You should go through the probate process in Orlando as the first step to selling your home. The court will then authorize you to proceed as you wish. If there are any other individuals involved in the inheritance, you should first agree with each other on that decision. You can then file a petition requesting the court to allow you to sell the property.
You should then consider how much tax you are to pay. This will be paid against the capital gains or losses resulting from the sale of the house. You can call SellThatFloridaHouse now at (407) 228-3682 to undertake a smooth and legitimate sale of your home. We are local here in Orlando, Florida and we know the market here better than anyone else. We would be happy to discuss it with you in more detail over the phone!
Selling an inherited house in Orlando can relieve you of quite a burden. In addition to that, selling the property to an investor is a basic simple and fast process. Contact us for inquiries on how to go about things when selling your home in Orlando and we will be glad to help you.