Inheriting a home in Delaware is often a bittersweet event — while it can be a valuable asset that offers financial opportunity, it also comes at a time when you’re grieving the loss of a loved one. If you’re the heir of a property and considering selling it, one of your biggest questions might be:
👉 “What are the tax consequences when selling a house I inherited in Delaware, Delaware?”
The good news? Selling inherited property often carries less tax burden than most people expect. Thanks to favorable IRS rules and capital gains tax laws, heirs can often avoid excessive tax liability when navigating the sale of an inherited home — especially when they understand how stepped-up basis, capital gains, and probate rules apply.
In this guide, we’ll break down exactly what you need to know about inherited property taxes — and how to sell your inherited house fast in Delaware without headaches, delays, or excessive fees.
🧮 Step 1: Understand Stepped-Up Basis in Delaware
When someone passes away and leaves behind real estate, the IRS allows a stepped-up cost basis for the property.
What is stepped-up basis?
The stepped-up basis is the current fair market value (FMV) of the property on the date of the deceased’s death — not what they originally paid for the property.
🔎 Example:
- Your father purchased a home in Delaware in 1990 for $60,000.
- At the time of his passing in 2024, the home is worth $210,000.
- Your new “basis” in the home is $210,000, not $60,000.
If you later sell the property for $215,000, your capital gain is only $5,000, not $155,000 — significantly reducing your tax liability.
This rule exists to avoid penalizing heirs for decades of natural home appreciation, and it helps minimize the impact of capital gains when selling inherited real estate.
💰 Step 2: Understand Capital Gains Tax on Inherited Property
When you sell an inherited house in Delaware, any profit from that sale may be considered a capital gain. However, since inherited properties are automatically considered long-term assets by the IRS, they’re eligible for the more favorable long-term capital gains tax rate — even if you sell it immediately.
Capital gains tax rates (as of 2025):
- 0% if your taxable income is below $44,625 (single) or $89,250 (married)
- 15% for most middle-income earners
- 20% for high-income earners
The capital gain is calculated as:
Sale Price – Stepped-Up Basis – Allowable Expenses = Capital Gain
If you sell the house for less than the stepped-up basis (which may happen in a cooling market or with a distressed property), you may even be able to claim a capital loss on your taxes.
🧾 Step 3: Reporting the Sale of an Inherited Home
When you sell the property, you’ll receive a Form 1099-S from the title company, which reports the sale to the IRS. You’ll need to:
- Report the sale on Schedule D (Capital Gains and Losses)
- Include your stepped-up basis and any capital gains
- Keep detailed records of:
- Property valuation at time of death
- Selling price and date
- Selling expenses (agent commissions, closing costs, repairs)
If there are multiple heirs, you’ll need to divide gains and file accordingly. We always recommend consulting with a qualified tax advisor or estate attorney in Delaware for personalized guidance.
⚖️ Step 4: Probate, Ownership, and Legal Authority
Before you can sell the inherited house in Delaware, you’ll need legal authority — typically granted through probate, unless the home was held in a trust or passed through a Transfer on Death Deed (TODD).
Here’s what to do:
- Open probate in the county where the property is located
- Petition the court for authority to sell
- Ensure all heirs are in agreement (or settle disputes with mediation)
- Once approved, title can be transferred to your name and the property can be sold
Need help navigating probate or working with multiple heirs? SellMyDelawareHouseFast.com can connect you with trusted local probate attorneys and offer you a fast, fair cash offer — even if probate hasn’t yet closed.
🛠 Do You Need to Fix Up the Property Before Selling?
Not necessarily.
Inheriting a house often means dealing with an older property that hasn’t been updated in decades. If you don’t want to spend time or money on:
- Cleaning out belongings
- Updating old fixtures
- Dealing with repairs
- Hosting showings
You can sell the property as-is for cash.
At First Care Homes, we buy inherited homes in Delaware in any condition — no repairs, cleaning, or agent fees required. Whether the home is full of clutter, outdated, or has code violations, we’ll still make you a fair cash offer and close on your terms.
📉 Avoiding Common Mistakes When Selling Inherited Property
- Overpricing due to emotional attachment
Sentimental value can cause sellers to overprice. Buyers pay based on condition, comps, and location. - Waiting too long to act
The longer the property sits, the more you pay in taxes, maintenance, and insurance. If you’re ready to sell, act quickly. - Not consulting a tax expert
While capital gains are often favorable, mistakes in reporting can result in IRS issues. Always consult a tax pro if unsure.
📲 Ready to Sell an Inherited House in Delaware, Delaware?
At SellMyDelawareHouseFast.com, we’ve helped many local families navigate the emotional and financial challenges of selling inherited property. Whether you need:
- A quick cash offer
- Help during probate
- Guidance on your tax options
- Or just someone to talk through your options with…
We’re here for you. We’re local, we’re experienced, and we make selling your inherited house fast, simple, and stress-free.
Call us today at (302) 789-7355 or visit
👉 SellMyDelawareHouseFast.com to request your free, no-obligation cash offer.