Inheriting property can be an emotional life event. But eventually, and usually, there comes a time to start thinking about selling an inherited property.
After all, some homes come with extra baggage, like becoming an accidental landlord, inherited property tax, and more. Selling inherited property can take an emotional toll on some.
In certain states, you will be required by law to fulfill specific requirements before selling a home you inherited.
But for now, let's talk about whether or not you're required b law in Utah to pay inheritance tax.
1. Do You Need to Pay Inheritance Tax In Utah?
The short answer is no. There are only six states where this is required:
- New Jersey
- And Pennsylvania
That being said, most of these states will exempt you from paying an inheritance tax if you are the spouse or child of the deceased.
2. How Long Does Transfer Take in Utah?
Before you can start the process of selling a home you've inherited, you need it to be transferred into your name. This process can take around 3-4 months.
The entire process, from taking ownership to selling the property, can take up to 15-24 months. But what if, legally speaking, no one was named the inheritor of the property?
3. What is The Probate Process, and How Long Does it Take In Utah?
If the deceased has not officially named an inheritor, the unnamed inheritor will need to file a petition at the probate court.
The probate process will include the following:
- Evaluating and pricing assets
- Paying for expenses, including paying inherited property tax
- Finding the proper heir to the property
The court can take 10-15 months to validate the owner's will or long, depending on the number of inheritors and state laws.
This can all be circumnavigated if a legally binding will is in play.
4. Capital Gains Taxes in Utah
When you're planning on selling a property, you will need to pay some Capital Gains Taxes. This tax is usually levied by the IRS (Internal Revenue Service).
The IRS only collects these taxes once the property is sold. You can work out the estimate by comparing the difference between the market value and the selling price.
Investopedia states, "A capital gain occurs when you sell an asset for a price higher than its basis."
This means if the property was valued at $250,000 when it was initially purchased, it was revalued when the deceased passed away at $300,000.
If you sold the property at $325,000, you'd owe roughly $25,000 to the IRS.
Be aware this can vary. But if you sold it on at $300,000, you'd owe the IRS nothing in Utah.
5. Make Some Minor Repairs
If you are determined to sell the property, we'd recommend doing a few small jobs. Don't sink too much capital into these jobs, as you won't benefit from any returns on investment.
For those with no capital, you can sell as-is for cash to an iBuyer service. Or you could ask a real estate company to assist.
Selling Inherited Property Has Never Been Easier
Wolfnest is ready to assist you in selling inherited property - today.
We understand that taking constructive mental steps to start thinking about selling inherited property can take months or years.