Inheriting a house can be a deeply emotional and financially significant event. On one hand, you’ve received a valuable asset that could help improve your financial situation. On the other, it often comes during a time of grief and transition. One of the most common questions people ask is: “What are the tax consequences when selling a house I inherited in Wilmington, Delaware?”
Fortunately, current tax laws are designed to ease the burden for those who inherit real estate. While selling an inherited property does come with tax implications, the rules are more favorable than many expect.
🧾 Understanding the Tax Basis of an Inherited Property
To determine any tax consequences from selling the inherited home, you first need to understand how the “cost basis” is calculated.
What is cost basis? The cost basis is the value used to calculate your capital gain or loss when you sell the property. With inherited homes, the IRS uses a stepped-up basis. This means the basis is adjusted to the home’s fair market value at the date of the previous owner’s death — not what they originally paid for it.
Example: If your parent bought the home for $50,000 thirty years ago, but it was worth $250,000 at the time of their death, the new cost basis is $250,000. If you sell it for that amount, you owe zero capital gains tax.
This rule significantly reduces the amount of tax owed when you sell the home — especially in markets like Wilmington where property values have likely appreciated.
💸 Capital Gains Taxes on Inherited Homes in Wilmington, Delaware
Any profit you make from the sale of the inherited house is considered a capital gain, but here’s the good news: inherited property is always considered long-term, even if you sell it immediately.
Short-term vs. long-term capital gains:
- Short-term (owned less than 1 year): taxed at your regular income rate
- Long-term (owned more than 1 year or inherited): taxed at lower rates — typically 0%, 15%, or 20%, depending on your income
So, even if you sell the house right away, you still benefit from long-term capital gains tax rates.
Key tip: Keep documentation of the home’s market value at the time of inheritance. This will make tax reporting easier when you sell.
📑 Reporting the Sale of an Inherited House
Selling an inherited house means you’ll need to report the transaction to the IRS. Here’s what that looks like:
- Calculate the gain or loss: Sale price minus the stepped-up basis
- Report it on your tax return: Typically on IRS Form 8949 and Schedule D
- Pay capital gains taxes if applicable (based on income and profit)
If you sell the house below the inherited basis, you may even claim a capital loss, which could reduce your taxable income.
⚖️ Navigating Probate in Wilmington
Before selling an inherited property, it may need to go through probate, a legal process in which the estate is settled and assets are distributed. If you’re the executor or co-heir, you’ll need permission from the probate court to sell the home.
Steps to sell an inherited house during probate:
- File with the probate court
- Receive authorization to sell
- Agree on the sale with all heirs involved
- File a petition if necessary for court approval
This process can take a few weeks to several months depending on the complexity of the estate.
🏡 Selling the House You Inherited — Fast, Fair, and Simple
Inheriting a property can feel like both a blessing and a burden. If you’re not planning to live in the home or rent it out, selling may be the best option — especially if the home requires repairs, is vacant, or is causing financial strain.
At First Care Homes, we specialize in helping homeowners just like you in Wilmington, Delaware sell inherited properties quickly and with zero stress. We can:
✅ Buy the home in as-is condition — no repairs or cleaning needed
✅ Make you a fair, all-cash offer within 24 hours
✅ Help you navigate the probate process and paperwork
✅ Close in as little as 7–14 days, or on your timeline
✅ Handle all closing costs and fees — you pay nothing out of pocket
📞 Ready to Sell an Inherited House in Wilmington?
If you’re wondering what to do next or still have questions about the tax consequences of selling an inherited property in Wilmington, Delaware, we’re here to help.
Contact First Care Homes today at (855) 896-7355 or visit https://sellmydelawarehousefast.com for a free, no-pressure consultation.
We’re local experts who understand the market, probate, and tax implications — and we’re ready to make your sale simple and stress-free.
Selling an inherited home doesn’t have to be complicated. With the right guidance and a cash buyer who knows Wilmington, you can turn that property into cash and move forward with peace of mind.