topic Re: Inherited House: Sell in Estate or Retitle then Sell? in Get your taxes done using TurboTax

Inherited House: Sell in Estate or Retitle then Sell?

GrilledTaxes2024 — Wed, 11 Feb 2026 10:34:36 GMT

Sole heir situation Colorado; Inherited family house, it's now 4yrs after death of mother.
Delinquent in transferring ownership but have gotten personal rep. reinstated via lawyer and have two options:
1) Either sell through estate using title commitment via title co. & lawyer and pay capital gains,
2) Use Personal Rep. Deed to transfer ownership into name then sell after 1 yr.* If ownership is transferred would that be a step up basis sale situation or is the same capital gains scenario equally in affect as option 1?

*Heard that title company's need 1 year ownership for PR Deed to warranty. ... correct?

Not primary residence renovating for eventual sale.

Thanks in advance.

Re: Inherited House: Sell in Estate or Retitle then Sell?

Anonymous_ — Sat, 14 Dec 2024 20:39:15 GMT

Re: Inherited House: Sell in Estate or Retitle then Sell?

Opus 17 — Mon, 09 Sep 2024 22:27:51 GMT

In both cases, your basis is the FMV on the date your mother died. If you don't live there as your main home, you pay the same capital gains tax either way, on the difference between the FMV on the date of her death and the selling price. Under scenario 2, you report 2 different sales, with the 4 year gain in one sale and 1 year gain in the second sale -- is there a reason to think the market will go up so fast that you want to hang on to the house a little longer?

Re: Inherited House: Sell in Estate or Retitle then Sell?

Opus 17 — Mon, 09 Sep 2024 22:31:30 GMT

You will have to ask a local real estate professional or title insurance company about the rules they follow, but if the new owner really needed to wait 1 year to sell before they could get title insurance, house flipping would be impossible, or at least very impractical.

However, if you sell the house to yourself (essentially) and then sell it later, if you wait less than 366 days, you probably lose the tax advantage of long term capital gains, and pay a higher short term capital gains tax rate.

Re: Inherited House: Sell in Estate or Retitle then Sell?

Anonymous_ — Sat, 14 Dec 2024 20:39:25 GMT

Re: Inherited House: Sell in Estate or Retitle then Sell?

Anonymous_ — Sat, 14 Dec 2024 20:39:38 GMT

Re: Inherited House: Sell in Estate or Retitle then Sell?

Anonymous_ — Sat, 14 Dec 2024 20:39:49 GMT