• Capital Gains Tax: Owed when selling an inherited home for more than its market value at the time of inheritance. The "step-up" rule often reduces capital gains by resetting the property's value to its worth at the time of the previous owner's passing. Executors must file an estate tax return, and sellers must report the sale on their income tax return using IRS Schedule D.
Ownership and Title Transfers
Real estate ownership must be legally transferred before a home can be sold. The executor or probate court will issue a new deed naming the heirs as owners. Required documents may include: • The death certificate • The probated will (if applicable) • An executor’s or administrator’s 9
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