Getting an inheritance from your parents may seem like a lottery jackpot, especially if it is a house. In the case of other siblings, it can become financially and emotionally complicated. Before selling inherited property in St. Louis or elsewhere, make sure you are clear on a few important issues. As the owner, you have 3 options:
- Sell it outright
- Move in
- Rent out
Things to know about inheriting property:
- Bills and existing debt: If you are currently renting, it may seem like a good idea to move in. If there are other siblings, they may not like it. Renting out the house could be troublesome, especially if the house is older and needs fixing. Selling it is usually the most popular option, especially if bills and debts have to be paid.
- Tax breaks: Selling the house is the best option as there are no capital gains taxes to be paid. Each state has different laws governing inherited property and its valuation. Talk to a lawyer and find out what the impact is likely to be.
- Federal Taxes: Make sure to talk to an estate lawyer and find out if you have to pay federal estate tax. It varies from one state to another.
- Existing mortgage: Unless the loan on the house has been paid off by your parents, you will have to sell the house to pay off the loan. And in case the house is paid for, it can still be expensive to deal with – homeowner’s insurance, general wear and tear, property taxes, heating and cooling bills eventually add up.
- Other issues: There are many memories attached to the home parents live in and many find it hard to deal with personal items like clothing and furniture. It is a good idea to list and divide items among siblings to avoid conflict.
Though it is difficult to deal with inherited property, doing nothing over a long period can become expensive. Deal with the estate and make a decision on selling or renting to avoid insurance and maintenance costs on an empty house.