One of the first questions families ask after a parent passes is whether selling the house will bring a big tax bill. In most cases, heirs owe little or no capital gains tax. I explain why in this 30-second video.
I’m a real estate broker, not an attorney or tax advisor. This is general information, not legal or tax advice. Please talk with a CPA and a Colorado estate attorney about your situation.
3 things heirs should know
1. The basis steps up
When you inherit a home, your tax basis usually resets to the home’s fair market value on the date of death, not what your parents paid for it.
2. It’s automatically long-term
Inherited property is treated as held long-term, even if you sell a few months after the death.
3. Get a date-of-death value
A solid, dated valuation is your proof if the IRS ever asks. Learn more about date-of-death home valuations.
For examples and special cases (joint tenancy, gifts before death, trusts), read the full guide: Capital Gains Tax on an Inherited House in Colorado: Stepped-Up Basis Explained.
Get a free date-of-death market analysis
Call (720) 403-2940, text Adrienne at (303) 597-8720, or reach out here. You can also download our free Colorado probate home sale checklist.