Selling Inherited Property Thornton: Tax Implications
Inheriting a home from a loved one or relative can be a great gift, however, it can also be a challenging inconvenience, but this will vary from case to case as well as depending on what you plan to do with the inherited property.
In some cases, selling inherited property Thornton has proven to be the ultimate solution, especially where there are several siblings inheriting the said property. However, there are cases where families have sold their current homes and decided to move to inherited houses.
Of course, the idea of moving into the house would only make sense if the inherited house is in a better physical condition, but there are cases where the property is inherited from old people who had lived there for over 30 years. This is a house that was built in the 1970s and as such, it may be hard to attract young adults looking for the modern designs.
There is also the option to rent the house, but many people pass this option due to the many issues associated with being a landlord as well as the many negative stories about real estate management agencies. As a result, selling inherited property Thornton remains to be the ideal choice.
It’s not an easy process and it could take months or even years before you are able to sell inherited property in Thornton. Right from the part where you have to deal with emotions of selling a house that belongs to someone you really loved up to the part where you close the sale. As a result, the last thing you want to go through are obstacles that will make you suffer even more in terms of time and money spent.
When you decide that selling inherited property in Thornton is the right course, there are several options you can use to earn some good money from the sale. However, the option you go with will depend on why you are selling the property. If it’s for urgent financial reasons, you may want to deal with a company that buys houses in Thornton such as Denver Property Flip. However, if you are selling simply because you don’t want it, you may take your time and sell it via a real estate agent, but make sure you are still able to meet all the expenses of owning a house pending the sale.
There’s also the option of selling the house by yourself, which can even involve doing it at an auction – something that can earn you even more money from the sale.
Regardless of the channel you choose to sell your house, one of the first things you must be keen to evaluate is how the sale of the inherited property will affect your financial position. In short, selling a house may mean that you are subject to taxes on any amount of money you make after selling inherited property Thornton. Also, you might be subject to taxes as a result of inheriting the property itself, even before you make the sale.
For starters, you need to know that inherited property does not qualify for the home tax exclusion. This only happens when you are selling a house that has been your home for at least two years of the past five years. In such a case, an individual selling a house at up to $250,000 will not be charged any taxes and in case of a couple, there won’t be taxes for proceeds of up to $500,000. So, unless you have plans to live in the house for at least two years before selling it, you can forget about any tax exclusions. The good side of the story is that you can take advantage of a stepped-up tax basis. If the inherited property has appreciated dramatically over the past few years, you may save a lot on taxes since the proceeds will be calculated based on the fair market value of the property at the time of the previous owner died.
It’s also important that you know where and how to report house sale proceeds. When you sell an inherited property, it should be recorded as a taxable income. Even if no taxes will still be owed, the IRS requires that the sale of inherited property is reported.
In order to understand these laws better, you’d rather seek the assistance of an attorney or accountant. This is the person who will also help you figure out the nitty-gritty of selling inherited property in Thornton.