Inherited Property | Are You Ready To Shoulder The Inheritance Tax?

Inheriting a property directly from your parents or a close relative may bring in positive returns as it adds to the number of assets in your possession, especially if the property itself is located in an area with high real estate values.

However, an inherited property doesn’t simply fall under your name. The most worrisome among the concerns voiced out by the inheritors is the amount of tax that needs to be paid, which will then add to their current list of bills.

In an article written by Julie Garber from The Balance, taxes come in three types: inheritance, estate, and income taxes. Garber added that only six states currently collect inheritance tax – Iowa, Nebraska, Maryland, Kentucky, Pennsylvania and New Jersey.

Living In It vs. Renting It Out vs. Selling It

When a property is passed down to you after the passing of your parents or a close relative while you are still dealing with a thick pile of medical bills or mortgage and taxes you haven’t settled, or glaring at a big chunk of deduction on your savings; what course of action would actually work for you?

1. Accept the Property and Live In It

What are the benefits?

Firstly, you will have enough time to clean after the departed’s belongings are gathered from all over the house. You can either keep them or sell everything in the house all together before you start redecorating to add in your touch and taste.

Secondly, you can improve the house, fix it up, apply renovations where it is needed and give it a brand new look. This is a wise step if you aim to sell the house later on. Of course, this is doable only if you have the necessary funds to pay for these house value enhancements.

If the property is located near the metro area or within NYC, then most likely its house value will double in the coming years. Of course, proper tax rates will apply. Learn more about taxes on this page.

2. Rent It Out For Extra Income

What are the benefits? 

Firstly, an extra property that will help generate income for you is already a plus. The monthly rental can cover for the property tax that you will have to shoulder after the house is transferred under your name.

Secondly, you can convert it into a multipurpose estate. A good example would be to rent it out as a summer vacation house or a recreational place for educational and spiritual activities and programs while your family can still use it for family gatherings on special occasions.

You can change it into a rental estate to depreciate the asset and save on your tax due. The insurance policy should be changed as well into a landlord policy which will cover the entire structure as well as the medical and legal liability in case uneventful things happen.

3. Sell It Fast

What are the benefits?

Firstly, when having an additional estate on your hand is considered more a burden than a blessing, selling the property might be a welcomed option, especially if the location is a hot spot on the real estate market.

Secondly, the money incurred by selling the inherited property will greatly add to your bank savings, of which you can use to improve your current home structure, set aside as part of your children’s educational plan, or add to your retirement savings. You can re-purpose the funds however you see fit.

And when time isn’t on your side and a rush sale is what you need, traditional methods just wont work since it requires a lot of waiting around for the right buyer.

Sell Any House, a reliable We Buy Houses company, will help you with the selling process. In as little as give days without requiring renovation and beautification, you can have a fair cash-out directly sent over to your bank. It is remarkably smooth, easy, stress-free process leaving you with satisfactory outcome.

Learn more about our New York team of real estate experts and our fast house-buying process at www.sellanyhouse.com/we-buy-houses-new-york-city/ and start the process by filling out our short form. We look forward to hearing from you, and we’ll be in touch with you as quickly as we can.

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