inherit the property, gains (or losses) are divided equally among them, and each heir must report their share on their taxes. If the property sells for less than its stepped-up basis, no taxable gain is incurred. Heirs must also consider property tax reassessments under California’s Proposition 19. Unless specific parent-to-child or grandparent-to-grandchild transfer exemptions apply, the property will likely be reassessed, potentially resulting in a higher tax burden.
PREPARING THE PROPERTY FOR SALE
Preparing an inherited home for sale often involves clearing out personal belongings, making necessary repairs, and staging the home for buyers. Heirs should prioritize removing heirlooms, important documents, and valuable items. Items of no significance can be sold, donated, or hauled away by professional services. For heirs who live far from the property, managing these tasks can be particularly challenging. Real estate agents, estate sale companies, and professional organizers can help oversee the process, but their services come at a cost. It’s crucial to account for these expenses when determining the sale price of the home.
FAMILY DYNAMICS AND DECISION-MAKING
When siblings inherit a property together, differing financial and emotional priorities can lead to tension. It’s the executor’s responsibility to make final decisions, but when the executor is also a sibling, this can further complicate family dynamics. Open communication and, if necessary, mediation can help resolve conflicts and ensure a smoother sale process.
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