Author Topic: Inherited a duplex out of state, now what?  (Read 959 times)


  • 5 O'Clock Shadow
  • *
  • Posts: 14
Inherited a duplex out of state, now what?
« on: June 23, 2018, 04:36:31 PM »
Any savvy RE folks (lawyer/CPA) who can give me some direction on the taxes associated with inheriting a property?

I live in PA and inherited a family members home in FL; it is in an irrevocable trust and willed to my two siblings and I. the lawyer facilitating the will let us know the property can be sold through the trust without the deed first transferred to our names, and the proceeds would be mailed out after expenses once it closes. Is it correct we (siblings and I) are only liable for income taxes on the appreciation of the property between the day it passed to us and the day it sells to someone else? If we keep it as a rental and transfer the deed to the three of us, does that change the taxation of the sale proceeds if we sell it in two years?

Are there any other things to be aware of or ways to limit a potential tax hit? My personal income is $100K+ if that matters. Looking into speaking with a CPA but always looking for more thoughts. TIA


  • Senior Mustachian
  • ********
  • Posts: 14494
  • Age: 62
  • Location: NorCal
Re: Inherited a duplex out of state, now what?
« Reply #1 on: June 29, 2018, 09:15:12 PM »
Sell it now. You don't know what the markets going to do, and you most likely don't want to be tied to two partners, even if you love them.


  • Handlebar Stache
  • *****
  • Posts: 1976
  • Location: So Cal
Re: Inherited a duplex out of state, now what?
« Reply #2 on: July 01, 2018, 11:58:08 AM »
Sell it unless you WANT to be an out of state landlord.

ONLY If you do, get a great management company and pay it to manage the property; but keep a close eye on all expenses and accounting.  Check out Bigger Pockets blog for info re whether it is a good investment.  Also, contact a competent local real estate lawyer to draw up an agreement between the owners re how the property should be managed, who pays expenses when there is no rent, when it should be sold, etc.


  • 5 O'Clock Shadow
  • *
  • Posts: 4
  • Age: 35
  • Location: Plano, TX
    • Financial Independence Through Real Estate Investing
Re: Inherited a duplex out of state, now what?
« Reply #3 on: July 02, 2018, 01:04:58 PM »
If you inherit a property it's generally at a stepped-up basis.

I'm not an expert on the taxes, but I believe if you take possession, the tax basis will be much higher than if the estate holds onto it at the old basis. Meaning less taxes if you take it first.

Definitely consult with a good accountant.