Inherited property enjoys favorable tax treatment, but a little planning can reduce the tax even further. Here are the main legitimate strategies.
Lean on the stepped-up basis
Because your basis resets to the date-of-death value, selling relatively soon after inheriting usually means little taxable gain. An appraisal establishing that value protects you if the sale price is questioned later.
Consider making it your home
If you move into the inherited house and live there for at least two of the five years before selling, you may qualify for the federal primary-residence exclusion—up to $250,000 of gain (or $500,000 for a married couple).
Other options for investment property
If you keep the property as a rental, a 1031 exchange can defer gain when you eventually trade up to another investment property. And Florida’s lack of a state capital-gains tax already works in your favor.
The right move depends on your situation and timing. Contact Hochberger Law, and loop in your tax advisor, before you sell.
This article is general information about Florida law, not legal or tax advice. Please consult a Florida attorney about your specific circumstances.