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Tax Consequences while selling an inherited house in Miami FL

Since we buy houses Miami, we are fully aware that selling inherited property is not the easiest thing to do. An abundance of pleasant memories can be difficult to let go of especially if you lived with the deceased. While Florida has no inheritance tax, there are other mandatory expenses that come along with new property ownership. Unfortunately, this additional financial obligation is not feasible for everyone to bear and you may have to bid farewell to the home. Continue to read this article where we explain some of the tax consequences you will incur while selling an inherited property in Miami, Florida. It is tough, but if your current paycheck cannot handle the stress of a new home, find out how we at Your Trusted Home Buyer a reliable investor can help you sell your Miami home quickly and receive a fair cash offer. 

  1. Capital Gains Tax (property inherited)

Capital gains tax is often a confusing subject, we will try and keep it as simple as possible to ensure you have full clarity on the matter

  1. Firstly, capital gains tax is not due when you inherit a property, only when you sell the property, that too under specific circumstances.
  1. Capital gains tax is due on all inherited assets when the market value of the home increases, post “step-up” basis. When you inherit a home, it is extremely likely to have appreciated in value since the time of initial purchase. Fortunately, the property’s tax basis is “stepped up”, and the tax basis would now be the current value of the asset.  Without this “step-up” selling the house could mean huge capital tax implications
  1. Suppose you inherited a Miami home purchased five years ago for $200,000, and today it is worth $400,000. If you sell the house immediately you will not have to pay any capital gains tax. However, if you let the property appreciate and sell it at a value of supposing $450,000, you will pay capital gains tax on the profit (capital gain) you generate. Or in other words, you are liable to pay tax on the difference between the stepped-up basis and the final sale price. 
  1. Hence it is in your best interest to talk to your family members immediately about what to do with inherited property. If you would like to avoid capital gains tax and the general upkeep, maintenance, and financial responsibility towards the property are far too strenuous- you should sell the home immediately. This is where Your Trusted Home Buyer specializes
  1. We can help you sell the inherited property in as fast as seven days and make the experience easy and hassle-free for you. You will have our 100% support and guidance while dealing with the entire process of closing and we will buy the property as- is; do not worry about repairs! 
  1. Capital Gains Tax (property gifted)
  2. When you receive a home as a gift rather than an inheritance on death, the tax implications are quite different. 
  1. Firstly, when assets are gifted the tax basis is not stepped up. You will pay capital gains tax on the difference between the initial value of the house and the final sales price. 
  1. However, you can avoid the capital gains tax in this case by living in the home for at least a couple of years before selling and you are liable to receive a $250,000 ($500,000 for a married couple) exemption from your capital gains tax. 
  1. Tax if the property receives income
  2. If the inherited property is generating income there may be tax consequences on all income before the formal transfer is made
  1. Tax consequence by inheriting from a non-US citizen
  1. This one is quite complicated, and it is best to seek appropriate legal advice. 
  2. There may be tax implications if you inherit a property from a non-US citizen, or if the beneficiary is a non-US citizen. 
  3. If the deceased was a non-permanent citizen of the US but owned property in Florida, the inheritance may be taxable. Similar applies if the beneficiary is also a non-US- citizen

While we have tried to keep it as simple as possible, navigating tax is not always straight forward and it is best to seek out appropriate help.

 If you need to sell the inherited property as quickly as possible, Your Trusted Home Buyer is the best choice available.  We buy houses Miami, Orlando and all around Florida. We are professional home buyers across Florida and will help you sell the home smoothly and receive a fair cash offer.

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