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Inheriting a House from a loved one can be a daunting task. There are so many directions in which you can go, that even the best amongst us have trouble. You could decide to move to the newly acquired home, or you could simply decide to sell the property. With either decision, the following information is, hopefully, going to help make your path easier should you inherit a home in Atlanta, Georgia.
As with many things, there are quite a few points to consider should you decide to sell the property. One of these is taxes. With different areas of the country, or state, there are different laws and tax requirements. We will focus on Atlanta for the remainder of this article.
It is important to know, inherited homes do not qualify for the home sale tax exclusion. Normally, when you decide to sell your home, if you’d lived in the home you plan to sell for more than 2 of the previous 5 years you qualify for the exclusion. This normally means that for a single homeowner qualifies for up to $250,000 to be tax free, while a married couple would qualify for $500,000. Because the home is inherited, unless you wish to move in you’ll have to pay taxes, should you choose to sell. There is good news however, should you decide to sell the newly acquired property, you benefit from a stepped-up tax basis. Normally, when a property is sold, the proceeds would be calculated using purchase price as well as any improvements made to the property while you lived there. If the property was inherited, taxes would be based off of fair market value at the time of the owner’s passing. The idea is to prevent adult children from also inheriting substantial taxes on properties that have depreciated over time.
Another important thing to remember is to make sure that you properly report the sale to the IRS. The proceeds from the sale of the inherited property needs to be reported as taxable income; even if there are no taxes due.
After determining to sell the property, you need to be sure to get it ready for sale. Firstly you should remove personal belongings. Houses tend to sell better when completely clean and empty.
Also, you need to wait for the property to completely pass through probate. In Georgia, you can benefit from a “Summary Probate” which is a simplified probate procedure.
Next, you should determine who holds the legal responsibility to handle the sale. If there is a will, the executor of the will is who holds this responsibility. They distribute the assets of the estate including real estate. In the event of a trust, the trustee holds the power over the estate.
You should also be sure to choose the right real estate agent. You should be sure that the agent you choose has your best interests in mind. Making sure you price the property well is a major decision. There are many factors that affect this decision. Several of them are whether or not there’s a current loan against the property, the market in the area, whether or not you plan to use the profits to pay off additional debts, and even more simply the property’s worth. A few tips: Don’t set your price too high, Don’t expect to get what you’re asking for, and Don’t settle for less than what your property may be worth. A couple things to remember is don’t be too hasty in accepting your first offer or too quick to make concessions. It’s very easy to walk away from a deal that doesn’t match what you need.
Selling the property can take some time as well. There are many things that can affect the sale and it’s good to work closely with your selling agent. Having the home inspected is a highly important step in this process. It’s an inspector’s job to look at every inch of a home to ensure that there aren’t any problems for a potential home buyer. A good way to get people interested in the home is to hold an Open House. An Open House is another way to hear feedback on the property and potentially address any issues potential buyers point out to the agent. Remember, just because you’re selling the house doesn’t mean that the mortgage and utility payments stop. You still have to make normal payments on the property that are due each month.
As with many things, there are always problems you will likely encounter and we’ve tried to list a few. This is not a full encompassing list but it’s a few that are important to consider. Executors can extend probate for years, which allows them to have use of the home, without ever actually transferring ownership. Be sure to check if there are any existing liens against the property. Handle the execution of the wills carefully as many wills require even distribution of funds or proceeds of the sale of the property. Something else to remember, don’t feel bad about the things you choose not to keep. Repairs should always be kept in mind, there may be more repairs than you knew about before the property came into your possession.
If you have any questions about the probate process, or inheriting a house, feel free to contact us directly from any of the forms on our site or at 770-810-5715. We’ve helped tons of homeowners figure out what to do with their inherited properties. We’d love to chat and see how we can help you too!
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