Hello World! Welcome Friends! When a family member dies, it’s devastating. On top of the grief, you also have the will to go through! No one wants to deal with these details while they mourn a loss, but you must.
For many people, the inheritance amount is pretty hefty! Surveys show that Americans inherit an average of $177,000 including property.
If your loved one gave you a house or other real estate, it can get pretty complicated, even if you are the sole beneficiary.
What are the implications of inheriting a house and what is inheritance tax? What are your options now? Keep reading for the answers to all your questions when you have inherited a house from a loved one who has passed away!
Financial Implications of Inheriting a House
The most unsavory thing about this whole house inheritance thing is the taxes and fees involved in the process. Uncle Sam and the lawyers gotta have their piece too, right?
No federal taxes apply to modest inheritance and only some states have laws that tax inheritance. For the “death tax” to apply, the inheritance would need to exceed well over 10 million dollars. Again, state laws vary, so check with your state and local tax departments for updated information on inheritance taxes. Inheritances are taxed at rates that depend on the individual’s income and location. When this tax is added up, it can be as high as 80%. There are typically two ways to avoid inheritance tax: by giving heirs less money than they would otherwise receive or by planning for what will happen when you die.
For an average home in America, an appraiser decides the market value of the house at the time you inherit it. If you sell it for more money than the market value when you became the owner, that profit falls into the capital gains tax category at the end of the year.
Another thing to consider if you plan on keeping the house is the mortgage and the property taxes. You may want to live in the 7 bedroom mansion your aunt left you, but if you can’t afford the taxes, you’ll lose the house anyway. Be realistic about what you can afford when deciding what to do with a house you inherited.
What to Do With an Inherited House If You Are the Only Beneficiary
It’s not uncommon to see a house or other real estate to have more than one beneficiary. If you are lucky, you will own the house by yourself and you won’t have to agree with someone else when deciding the fate of the property.
For those who find themselves the sole owner of an inherited house, these are your options:
Sell the House
If you have a home you love already or if you don’t want to move into the inherited house for any reason, you might consider selling the house. One important step is finding eligible buyers. You can do this by typing in online ‘sell an inherited house in California‘, or set to your preferred location. Here you can begin to assess your options.
A potential problem with keeping the house has to do with finances. If there is still a mortgage, can you afford it? What about the annual property taxes?
Few people plan to inherit a house, and it often does not align with their current lifestyle. Don’t feel bad about selling your loved one’s house if you don’t intend on living in it!
You don’t want to let the house sit vacant forever either. Every month that the house is on the market, you waste a ton of money! Check out these tips about how to sell a house as fast as possible.
Rent the House
Many people have a hard time selling a house they grew up in or one they have an emotional attachment to. If you don’t want to (or can’t) move into the house, but you can’t sell it either, what can you do?
You could try your hand at becoming a landlord! It is much easier to rent a house when it is within driving distance of your house, but some people have found success renting properties on the other side of the country!
There are also rental management companies that you would pay a cut of the rent each month to advertise, lease, and maintain the property for you! All you need to do is sit back and collect the rental income checks!
Move into the House
One of the easiest options when you inherit a house is to move in! If you live in an apartment or a less favorable house, why not take the upgrade?
If you lease your current home, check your lease agreement to see what penalty (if any) exists for early termination of the lease. If you have an expensive penalty fee, try talking to your landlord. They may work with you and agree to let you move out for a lesser fee once they have a new tenant lined up.
For those who already own a home, if you want to move into the house you inherited, then you can choose to sell your current home. If the houses are close enough together, you have the option of renting out your current home and using it as another source of income!
A House Becomes a Home When You Add Love
When you are inheriting a house from a loved one it’s important to make the best choice for your current situation. Don’t let yourself get caught up in thoughts of what your family member wanted you to do with the house. If it makes financial sense to sell the house, do it.
If you decide that your family should move into the house, then it will become a home as soon as you arrive and fill the house with love. Home is where the heart is after all!
We hope you enjoyed reading this article and that you learned a few things about what to do when you have inherited a house. If you are looking for more information about decorating, gardening, home improvements and more, check out the rest of our blogs today!
Click the links below for any posts you have missed:
10 Tips For Arranging Furniture Like a Pro
How to Get the Best Value when Selling your Car
DIY Furniture Projects for Beginners
Cleaning Products for your Swimming Pool
Cold or Hot: Brewing Coffee at Home
Pest Presence – How to Rid Your Home of Unwanted Visitors
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Thanks for stopping by! Have a wonderful day/night depending on where you are in the world! Go with God and remember to be kind to one another!
Toodles,
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