How to Sell Inheritance Property With Siblings
The first thing that needs to happen when you want to sell a property that you inherit is making sure that it goes through probate. Most states allow for summary probate, an quick process that doesn’t take a lot of time or require legal counsel, available only for small estates ranging in value from a few thousand dollars to a few hundred thousand dollars. Most estates usually include property and other assets which usually means that you will not qualify for the summary probate due to the estates value exceeding the qualified range. . Once the estate goes through probate, the court gives the executor of the will the right to act to distribute the estate’s assets and settle the estate’s debts. If you’re the executor and you have siblings who share in the inheritance of the property, you’ll need the permission of your siblings and the courts to sell.
Agreeing to Sell
the executor can petition the court to allow the sale, If everyone involved in the inheritance agrees the property should be sold.. Problems arise when one or more siblings wants to sell and the others want to keep the property. If so, a negotiation will have to take place. The sibling who wants to keep the property can buy out the other siblings’ interest in the property. At this point, there is a possibility that they may need a loan.. Other times, selling the property is the only choice to settle debts of the estate. In this case, the courts may overrule the dissenting sibling. If you’re having problems arriving to a solution, a family mediator may be able to help broker one. And you should have an estate lawyer represent you to avoid costly legal mistakes.
Preparing to Sell
The home you inherit may be old and may need some repairs before you can actually sell it. You’ll need to clear the clutter and consider hiring an inspector to recognize potential problems and recommend repairs. If you don’t live nearby, a local real estate agent can assess the property for you and suggest changes that will make the home more valuable, such as updating the kitchen or adding landscaping. You also have the option of selling the home “as is,” though in this case you may have to accept a lower price, especially if the house needs extensive cleaning or repair.
When you sell property you’ve inherited, your tax basis for the property is the home’s value on the day the person who willed it to you died. The difference between that value and the amount you realize from the sale is the gain on which you owe taxes. When several siblings inherit equal shares in a property, they divide the gain equally and each claim that share on their taxes. So, if the home was worth $300,000 when Mom died and you sell for $345,000 and three siblings inherit, each claims a $15,000 gain. If you sell for the value of the home or less, you don’t have a gain to report.