Taxes to understand before selling Mom's home
Plain-English overview of stepped-up basis, capital gains, and property tax questions families should ask before choosing a sale path.
Inherited homes usually get a stepped-up basis
When a home is inherited, its tax basis generally resets to the market value at the date of death. If the family sells reasonably soon at a similar value, there is often little or no capital gain to tax. Selling years later, after appreciation, can change that picture.
Selling before or after can be very different
If Mom sells her own home while living, she may use the primary-residence exclusion. If the family sells after inheriting, the stepped-up basis usually applies instead. Which situation applies — and the timing — can meaningfully change the tax outcome.
Carrying the house has tax costs too
Property taxes, and in some states reassessment rules when a home transfers to children, continue while the family decides. Those ongoing costs belong in the same comparison as repairs, cleanout, and sale price.
Common questions
Do we owe taxes just for inheriting the house?
Most families do not owe federal tax simply for inheriting. Taxes usually arise from gains after the stepped-up basis, or from state-specific rules. Confirm specifics with a tax professional — this is general information, not tax advice.
How do we document the stepped-up basis?
An appraisal or well-supported market valuation near the date of death is the common approach. Keep it with the estate records.