G&C Properties
Leanne Reynolds, G&C PropertiesPhone: (818) 731-9300
Email: [email protected]

Selling or Renting an Inherited House

by Leanne Reynolds 03/23/2020

Photo by Dave Frisch from Pexels

If you've inherited a house you'd rather not live in, here are some things to consider—before you accept it. Before we get to the selling or renting part, calculate the cost of:

  • Repairs and renovations.
  • Any debt that would pass to you with the home.
  • Annual property taxes.
  • Yes, you may decline your inheritance if it's too burdensome to accept, as long as you're not already named on the deed, and as long as you meet applicable deadlines for submitting a notarized disclaimer of interest form. 

    Now let's look at selling or renting.

    1. Selling an Inherited Home Can Produce High Tax Savings. 

    The federal tax treatment of an inherited home, when sold, can be highly supportive of a deceased homeowner's loved one or family. 

    Under IRS stepped-up cost basis rules, you may sell without paying tax on the gains that accrued since the deceased homeowner first bought the house. You'll pay capital gains tax only on any increase in the property's value between the time you inherited and the time you sold. These savings alone can be a great gift to you. 

    Inheritance taxes are not a major factor for most homes, and that factor is easily checked.

    2. Working Out a Shared Inheritance Commonly Means Selling.

    Are you one of several beneficiaries? Does everyone agree on what to do? One sibling may wish to sell. Another might want the house. These factors typically mean someone will sell their inherited interest.

    Selling after a loved one has passed away is quite often the best decision for all concerned. It relieves family or other loved ones of the costs of repairs and upkeep, utilities, taxes and insurance. It also ensures that everyone receives an equal share of the gift.

    3. You Could Have a Choice of Which House to Sell or Rent. 

    If you inherit a free and clear title, you can move into your inherited home, and enjoy it without debt, while selling your current home. Be sure to use the time when the home is in probate to speak with your real estate agent about preparing the home for sale.

    Renting out the house for investment income is another option. Your real estate agent can check for any zoning restrictions and offer you further pointers.

    Tip: If you rent out the home it won't be a primary residence, so it won't get the capital gains tax benefit when you ultimately sell the home. Yet certain rental property spending is tax-deductible, and rent-related income has a low tax rate.

    Need Advice to Fit Your Situation and Today's Market? We're Here to Help.

    Inheriting real estate can put a lot on your plate. Your real estate agent can advise you step by step, offering indispensable knowledge when you need it most. 

    About the Author

    Leanne Reynolds

    When you want a successful Realtor in today’s market to buy or sell a home, look no further than Leanne Reynolds, Your Key to Glendale Homes. What’s more, you will be working with one of the Top Ten Most Dependable of the Los Angeles Area, an honor awarded by Goldline Research in 2008 and has seen in Los Angeles Magazine. Working with you as a team, Leanne can make your purchase or sale a financial success while making the process as seamless as possible. As soon as you hire Leanne, you can go about your life and leave the real estates sales and all its details to her. Leanne is a Chicago native but has adopted Southern California as her true home. Although she specializes in the Glendale area, Leanne knows more about cities in Los Angeles than most native Southern California residents.

    Currently, Leanne lives in Glendale and owns a wonderful Spanish style home built in 1930. Her personal knowledge of older homes and architecture extends into her professional real estate career. She specializes in premier character and traditional properties in Glendale and adjacent areas and is an advocate for the preservation of character homes in this area. Leanne also supports the Historic Districting efforts underway to preserve the city’s unique neighborhood homes and buildings. Her services extend beyond assisting customers with their family home. She is an enthusiastic real estate investor. Contact her to buy or sell residential investment properties or identify 1031 investment property exchanges. Senior Solutions Real Estate Services

    As another specialty, Leanne assists senior citizens and their families with the selling or moving from a long cherished home. Learn more about her Senior Solutions Real Estate Services in this web site under the WELCOME SELLERS heading.Community Leader

    Leanne works with local groups to define and defend the neighborhood’s character and community history. Here’s a few of the ways she’s committed to Glendale and adjacent cities:

    * Serves on the board of directors of the Royal Canyon Property Owners Association in Glendale. Each summer she sponsors a Family Picnic for the neighborhood homes in this association

    * Is an active Member and Docent for the Glendale Historical Society. Check out more information on this terrific organization on this web site – ABOUT GLENDALE

    * Serves as a Board Member for the Burbank Philharmonic which provides free symphony events to Glendale and Burbank families

    * Served on the 100th Anniversary committee for Immaculate Heart High School in Los Angeles

    *Has also been a volunteer referee and assistant coach in the AYSO youth sports Prior to Real Estate

    Before her career in the real estate industry, Leanne executed marketing events for over three dozen Smart & Final stores in six state counties as well as Arizona, Las Vegas, Oregon and Mexico. Leanne was also a successful marketing and sales executive for several leading NYSE companies and received a journalism degree from USC. She’s a Trojan all the way!